Flour Mills Nigeria Plc and Unilever Nigeria Plc are among four stocks that Market Makers are betting there money on on the floor of the Nigerian Stock Exchange (NSE) today. They were selected yesterday to join the league of Market Making Stocks whose number has now increased to 43.
Besides t Flour Mills and Unilever are two other stocks from the Financial Services sector, Wema Bank and Royal Exchange Plc added to the list.
It would be recalled that about two weeks ago, the NSE announced the inclusion of Dangote Cement Plc, Oando Plc and Transnational Corporation of Nigeria Plc in the stocks to be traded by licensed select Market Makers. At the moment, there are 10 Market Makers whose job is to execute and maintain firm bids and offer according to the rules of the Exchange.
Market Making therefore is the process whereby a broker-dealer who has been registered as such, holds himself out to provide continuous two-way quotes (comprising of buy and sell prices and sizes) to the market for the securities that they make markets on during the trading day.
According to the NSE, yardsticks for selecting Market Making stocks include the history of their compliance to the rules of the market, past trading performance, financial capability and technology and businesses readiness.