Nigeria Says Stock Market Swings Will Be Contained (Update1)

The Central Bank of Nigeria said gains in stock prices over the past year were justified by corporate earnings and the outlook for economic growth and that the government is concerned by volatility in the market after shares tumbled in May.

The government and regulatory authorities will take “whatever steps are necessary to preserve the recent gains in the Nigerian Stock Exchange,” the central bank said in a statement on the Web site of the Abuja-based Nigerian presidency today. It didn’t give details on what they may do.

The Stock Exchange’s benchmark All-Share Index fell 11 percent between May 19 and June 6 on speculation that the central bank planned to act to halt margin trading, the practice of borrowing money to buy shares. The central bank denied it had any such plans, Lagos-based Thisday newspaper said on June 10.

Recent declines have pared the rally in the stock index over the past year to 10.5 percent from 34 percent on March 5