Monday, 16 April 2012

The Nigerian Stock Exchange and its new website

I just noticed today that the Nigerian Stock Exchange  (NSE) new website is up. The Exchange deserves some commendation  for putting up this new website. I am one of those who felt the old website was not good enough for an Exchange that seeks to be a leading market in Africa for trading securities and raising capital.
The Nigerian Stock Exchange building 

I had a feel around this new website this evening. My first impressions are mixed. Design wise it looks dull and still looks slow to download but that may be due to my own browser. My major problem with the last website of the NSE was the fact that it was not always available when you needed to access it for information. For an Exchange, that could be killing. However, I am accessing this new website for the first time today and I hope it is not usually this slow. The Exchange needs to sort this out if it is.
Oscar Onyeama-DG NSE

Also I noticed that the scrolling prices at the top of the home page have no links to the companies. I would have expected that the prices have links to the price history  of the companies so that investors can easily track share price trends for a period, say three months, six months, one year and more with a click.

Talking of historical price trends, I was able to register and access the data portal of the exchange, but I was not able to get historical data. Instead, I got a brief note asking me to specifically request for historical data at a fee. This demand is surprising for an Exchange that wants to attract investors and increase liquidity. One, this puts an additional transaction cost on investors. The implication is that retail investors who need historical price data on a company will have to pay for it. This is not investor friendly. Two, it limits who is able to access price information on the exchange. All Exchanges thrive on free flow of information. It is not investor friendly that they will have to request for this information and wait until whatever time to get that information.

What happens if two investors put in a request for similar historical price information at the same time, and one of the investors gets it ahead of the other? Would the Exchange not have given an unnecessary advantage to the investor that got the information first? In this age when historical price information and other basic company data on other Exchanges can be gotten with a click on websites like Yahoo Finance, I personally do not think it is a good idea that investors will have to wait for days to get similar information from the Nigerian Stock Exchange. Ease of critical information and cost of transaction are two key drivers of the competitiveness of modern stock exchanges. The NSE should not put itself at a disadvantage here. 

 If the NSE is going to be investor friendly, price information and basic company data should be easily accessible and all unnecessary transaction costs should be eliminated. That is the only way to enhance liquidity, which is vital for any exchange that wants to be considered a good place for companies to be listed.  I would expect that the management of the Exchange will visit leading Exchange websites like that of the London Stock Exchange  and model that of the NSE website after it as closely as possible. No need reinventing the wheel.

And still on the front page, I noticed that some links returned blank pages when you click on them. For example, under the Financial News  pages, the company links return blanks.  I hope that this is corrected. Returning blanks on a website can be quite frustrating mostly when you are looking for time sensitive information which is what most investors are always searching for.  

However, one commendable initiative I noticed was that under the NSE Highlights corner of the home page, there was a link to “Early Fliers” which provided a list of companies that had beaten the NSE deadline on submission of full year annual reports within three months of the end of their financial year. I think this is a good initiative from the Exchange and will serve as positive reinforcement for these companies who have done the right thing. The Exchange needs to adopt more of these positive reinforcement methods to encourage voluntary compliance and disclosure among its listed companies.

It is also commendable that the Exchange has taken the initiative to improve its website. We hope it continues to work at it until the site compares favourably with the best in the world.  Most importantly, the Exchange should realize that the primary purpose of its website should be to provide the highest standards of transparency through full and timely disclosure of all information pertaining to listed securities and not to make money. 

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