WITH a wide range of investments products, the Nigerian Exchange has assured its position in widening retail investors’ participation in the Nigerian capital market.
Jude Chiemeka, acting CEO of the Nigerian Exchange Limited (NGX), said the exchange is poised to support the capital market masterplan to attract five million retail investment participation by 2025, while noting that the exchange has different products that are attractive to different investment drives.
During a television interview, Chiemeka described the NGX as a multi-assets exchange with different investment classes that investors can take advantage of, while noting that aside equities, investors need to be aware of other investments opportunities at the exchange.
“There are certain returns in the market that many of them are not aware of and I think that is part of what investors’ education/financial literacy would do for retail investors. Last year, the market posted 45.9 average ASI return but there were other products.
“The NGX is a multi-assets exchange. We have other products aside equities that are listed. Our exchange traded funds, for instance, attracts 30 most capitalised stocks returned over a 100 percent. But investors need to be aware of these kinds of products.
“If you think about mutual funds, the exchange has over 20 mutual funds listed and some of these funds help investors diversify their portfolio returned as high as about 130 percent. Investors need to be aware of the products. They need to be aware of what is going on in the market in order to take full advantage of it,” he said.
Speaking on how the NGX is attracting the younger generation, Chiemeka explained that the exchange is creating products that resonate with the millennials and Gen Zs
“To bring them, you have to create products that resonate with them. We are creating a whole plethora of products for this group. For instance, digital assets, tokenisation of assets, creating Nigeria depository receipts. These are dollar receipts, you can invest in naira but it has exposure to dollar investments offshore. It can be used to mitigate FX volatility. So, we are working to create products that can widen the bracket,” he said.
He, therefore, noted that financial literacy/investors education is key in attracting more investors into the market, while noting that NGX has invested heavily on technology to deepen the market.
“Even before COVID, we were looking at the Fourth Industrial revolution, so, heavy investments were made in technology. Today, we have trading license holders that have online platforms that would allow investors to participate in our market.
“That architecture, that backbone for driving increased retail participation has been built by the exchange. Working in partnership with some telecommunication companies, we have platform and avenue for people to have access to the market,” he said.
He explained that there are different channels investors could connect with the exchange seamlessly. “We have our website, which is really interactive and functional. We have the USSD sort code, this gives lots of market data/market information that will allow you to take advantage of many opportunities that the market portends.”
He also noted that the exchange has gone into partnerships to broaden participation in the capital market and to attract investment opportunities beyond Nigeria.
“We are part of the African Exchange Linkage projects, which is an integration of African markets. It is a seamless backbone that is built, sponsored by African Development Bank. It allows investors to trade seamlessly across Africa.”
Chiemeka assured investors that with the demutulised exchange, investments are safe as there are structures that ensure a well regulated market.
“Trust is a matter of time. But we believe that with a well regulated market, SEC is on top of it, we have a demutualised exchange. We have NGX regulation that is in top of regulations. With a proper regulated market, operators will behave the right way.
“I believe we have earned back the trust of retail investors because we have created the structure. Today, we have a market counter party, NG Clearing. And that is really their role – to intermediate, to ensure that margin calls are made, that collateral is properly monitored, which we didn’t see during the financial bubble that happened the last time,” he said.
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