ASHON Seeks Stronger Oversight As NGX Rally Raises Valuation Concerns
The Association of Securities Dealing Houses of Nigeria (ASHON) has called for heightened regulatory oversight and market discipline as the sustained rally on the Nigerian Exchange Limited (NGX) fuels concerns over rising valuations and speculative trading.
The association cautioned that while renewed investor confidence and improved macroeconomic sentiment have driven strong gains across equities, certain stocks appear to be recording sharp price increases without corresponding improvements in earnings performance, corporate governance, or underlying fundamentals.
ASHON warned that such trends, if left unchecked, could expose the market to volatility and heighten vulnerability to external shocks.
The body stressed that sustainable growth in the capital market must be anchored on measurable corporate performance, sound governance practices, and credible economic indicators rather than speculative momentum.
“The recent bullish run reflects improving investor sentiment and broader participation across asset classes,” the association stated.
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“However, market integrity must remain paramount. Gains that are not supported by fundamentals could create systemic risks over time.”
The association referenced the recent suspension of Zichis Agro-Allied Limited by the NGX over irregular trading activity as evidence of the need for proactive regulatory action.
According to ASHON, the Exchange’s intervention underscores the importance of maintaining orderly markets and protecting investors from potential distortions.
Market analysts have similarly expressed concern that excessive speculation in low-float or thinly traded stocks could inflate valuations beyond intrinsic worth.
Such developments, stakeholders argue, risk recreating conditions reminiscent of the 2008–2009 market downturn, when widespread speculative activity preceded a sharp correction in asset prices.
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ASHON therefore urged regulators, including NGX Regulation Limited (RegCo), to intensify surveillance mechanisms, enforce compliance with listing and free float requirements, and strengthen investor education initiatives.
The association also encouraged listed companies to improve transparency and timely disclosures to enhance market confidence.
Beyond regulatory enforcement, ASHON advocated broader structural reforms to deepen liquidity in the market.
It called for renewed efforts to attract new listings, diversify investment products, and expand participation from both domestic and foreign institutional investors.
The association reaffirmed its commitment to professionalism, ethical standards, and investor protection, emphasizing that optimism surrounding the equities market must be balanced with responsibility.
According to ASHON, a stable, transparent, and fundamentally driven capital market remains critical to mobilizing long-term capital for Nigeria’s economic development.