By Mellody Fidelis
The Nigerian Exchange Limited (NGX), says the market would soon see a renewal in Exchange Traded Fund (ETF) listings as four new funds were underway.
The Chief Executive Officer, NGX, Temi Popoola, said this yesterday at the ETFs conference themed: “ETFs in the Nigerian Capital Market: Opportunities and Challenges.”
Giving his remarks, Popoola explained that the Exchange is leading the ETFs segment in West Africa with a market capitalisation of N8.87billion ($19.25million), noting that the market is still in its nascent state, compared to the South African ETF market with a $7.11billion capitalization.
He said: “There has been a dearth of new ETFs listings on the NGX in recent years, however, there are bright spots on the horizon with four new ETFs listings in the pipeline.
“It is incumbent to state that current macro-economic challenges resulting in the exit of foreign investors, impacted the ETFs space which resulted in a sharp dip in the ETFs market Cap from 2020 highs of N24.5billion. We are hopeful that the policy tilt of the new administration would impact positively on our market.”
There has been a dearth of new ETFs listings on the NGX in recent years, however, there are bright spots on the horizon with four new ETFs listings in the pipeline.
Also speaking, the Executive Commissioner, Operations, Securities and Exchanges Commission (SEC), Dayo Obisan, who spoke on the challenges in the market, however expressed confidence in the ability of experts to proffer solutions.
He urged all stakeholders including the Fund Managers Association, NGX, and other institutional investors to extend the message of ETFs to deepen the market and make the asset class more vibrant, thereby driving growth in the capital market.
The Executive Director, Central Securities and Clearing System (CSCS) Plc, Adeyinka Shonekan, spoke on the firm’s developmental efforts in the ETFs market.
He said the CSCS is using technology to improve the onboarding of retail investors into ETFs. “CSCS has been driving the initiative to reduce the settlement cycle from T+3 to T+2 or T+1 and we have been engaging stakeholders to make sure we make this a reality,” he added.
Manager, Business Development and Exchange Traded Products at the Johannesburg Stock Exchange (JSE), Adele Hattingh, gave an overview of the South African ETFs market including why investors should consider investing in the asset class.
Also, the Managing Director, Vetiva Fund Managers Limited, Oyelade Eigbe, on her part also spoke on how retail investors could access the ETFs market in Nigeria and monitor their investments.
During the panel session, capital market experts further addressed the opportunities and challenges of the market, with liquidity as a central topic of discussion.
Speakers included Aigbovbiose Aig-Imoukuede, President, FMAN, Oladele Sotubo, CEO, Stanbic IBTC Asset Managers, FBN Quest Capital and Nornah Awoh, Chief Equity Analyst/CEO, Palesa Capital Markets Associates.
