Extending the Clock: How Longer Trading Hours Could Transform the Nigerian Exchange
As Nigeria’s capital market matures, the Nigerian Exchange (NGX) is taking bold steps toward transforming itself into a more dynamic, liquid, and competitive market. One of the most anticipated moves currently under consideration is the extension of trading hours from the current window of 10:00 a.m. to 2:30 p.m., to a longer, full-day session ending at 5:00 p.m.
This proposed extension of trading hours is not happening in isolation. It aligns with ongoing reforms aimed at enhancing the operational efficiency of the Exchange, including the shift to a T+2 settlement cycle (i.e., transaction plus two days for settlement), as well as broader strategic objectives like increasing market penetration, attracting more local and foreign participation, and improving liquidity.
So, what does this mean for investors, brokers, and the overall Nigerian economy?
At present, the NGX runs for 4.5 hours daily significantly shorter than many developed and emerging market exchanges. For example, the London Stock Exchange trades from 8:00 a.m. to 4:30 p.m., while the New York Stock Exchange is open from 9:30 a.m. to 4:00 p.m. The limited trading window in Nigeria places a constraint on market liquidity and restricts the ability of both institutional and retail investors to respond to market-moving news in real time.
Extending trading hours to 5:00 p.m. could offer multiple benefits:
1 With more time available for trading, buyers and sellers have a better chance of meeting, thus deepening liquidity and tightening spreads.
2 Longer hours accommodate more investor profiles including international investors in different time zones and local participants who prefer after-work trading.
3 With increased activity and participation, the market will be better positioned to reflect real-time economic and corporate fundamentals.
4 A longer window allows for better alignment with trading patterns in other regions, reducing latency in reacting to global developments.
Linking Trading Hours to the T+2 Settlement Cycle
The Nigerian Exchange had already made significant strides in recent years by adopting the T+2 settlement cycle, aligning with international best practices. T+2 means that after a trade is executed, the buyer must make payment and the seller must deliver the securities within two business days. This is a major improvement over the previously longer cycles that often introduced inefficiencies and higher counterparty risk.
A longer trading day complements the T+2 system in two key ways:
Operational Flexibility: More time within the trading day allows brokers and clearing houses to manage order flows more efficiently and match trades effectively, improving settlement readiness.
Risk Management: With more liquidity and trading hours, market participants can more easily hedge positions or unwind trades before the settlement date, reducing exposure.
The NGX has seen a surge in market capitalisation in the past year, buoyed by increased investor interest, improved corporate earnings, and a renewed push by regulators to deepen the market. Notably, the inclusion of more tech-driven companies, fintech players, and government reforms have helped attract both institutional and retail investors.
The numbers speak volumes:
Market capitalisation crossed the N50 trillion mark earlier this year.
Daily trade volumes have steadily increased, supported by digitisation and mobile access.
Foreign portfolio interest is re-emerging as macroeconomic reforms stabilise currency and inflation outlooks.
In this context, extending trading hours provides a natural next step. It acts as a pressure valve, allowing the Exchange to handle higher transaction volumes more efficiently while accommodating a broader set of market participants.
There’s a clear rise in retail investor participation, driven by mobile apps, increased financial literacy, and fintech integration. Nigeria’s youthful population is becoming more market-savvy, and mobile-based trading platforms have made it easier than ever to invest on the go.
For this demographic, longer trading hours open up new flexibility. Professionals who may not be able to trade during traditional hours now get a longer window, and this could be instrumental in driving further market inclusion and participation.
While the benefits are compelling, some practical considerations must be addressed:
Operational Cost for Brokers: Longer hours mean more staffing, energy, and compliance costs for brokerage firms. The Exchange may need to support smaller firms through this transition.
Market Fatigue: Some worry that longer hours could dilute market activity if participation spreads thinly. Strategic segmentation, such as extended hours for select instruments (e.g., blue-chip stocks), could be a phased approach.
Technology Readiness: A reliable and resilient infrastructure is critical to support longer hours without increased downtime or system lag.
As Nigeria aims to become a regional financial hub, reforms such as extended trading hours and improved settlement cycles are crucial for building investor confidence and operational sophistication.
This expansion is not merely about adding hours on the clock it’s about creating more opportunities, increasing transparency, and laying the groundwork for a more agile, resilient, and inclusive capital market. With better alignment to global standards and investor expectations, the NGX can unlock deeper pools of capital and offer better value to listed companies and investors alike.
In the long term, these steps could help pave the way for other innovations—such as 24-hour trading in select asset classes, enhanced derivatives markets, and more robust listing pipelines.
Extending the Nigerian Exchange’s trading hours to 5:00 p.m. may seem like a simple operational adjustment, but its implications are far-reaching. It marks a significant evolution in how Nigeria views and structures its capital market inclusive, efficient, and future-focused.
As more stakeholders align to support this move, the NGX positions itself not just as a trading venue, but as a key engine of economic growth and financial inclusion for Africa’s most populous nation. #Extending the Clock: How Longer Trading Hours Could Transform the Nigerian Exchange#
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