Wednesday, September 09, 2020 / 11:33 AM /
Bukola Akinyele for WebTV / Header Image Credit: Stanbic IBTC Nominees
Investors have been urged to leverage innovative platforms in the Nigerian capital market platform and avoid taking risks with Ponzi schemes.
The Chief Executive Officer (CEO) of the Stanbic IBTC Nominees, Mr Akeem Oyewale, made the point as a guest on WebTV's Market Review Program. Oyewale believed that for millennials, technology driven platforms with innovative products, provide an opportunity to get involved in the investment community and equities market, through segments of the market like Mutual Funds.
According to him adding the capital market into the school curriculum for millennials to understand the market and also boosting investors' confidence will improve the growth of the market in the country.
Speaking on the performance of the equities market despite the negative impact of COVID- 19 on the global Market, he explained that the Nigerian Stock Exchange's (NSE's) equities market has performed tremendously even though it is relatively weak at the moment.
He said amidst the crisis the Nigerian investing public still have faith in the market because at the beginning of the year a lot of offshore investors exist in the market.
"Aside from the negative return of -4.61% some stocks have returned to 100% which shows the resilience of the market and the ability of the Nigerian economy despite the fact that we came down quarter on quarter, some companies still come out doing relatively okay and a lot of organizations were able to manage their affairs and really go out of business" he said.
Looking at various quoted company results so far in the Exchange, the CEO cited examples of Okomu and Presco Oil Palm Companies in the Agri-Business space. He said, there were some segments in the market that have been more resilient than others.
He admitted that despite the slow growth of the economy, the resilience of the capital market was notable.
The finance expert noted that there has been a major challenge from an FX perspective in the country, which started since from March to August 2020 which made investors struggle in their quest to exit the market. This affected investment and also the number of companies in manufacturing, had difficulties importing raw materials which affected their business.
He was of the view that a Digital implementation strategy is inevitable for the NSE and other entities who implemented the BCP(Business Continuity Plan) process and went remote.
Oyewale was of the view that during the pandemic if any market or entities was not deploying remote trading, such organization will definitely be out of business. For him innovation has improved as a lot of organizations in the Capital Market has enhanced their Apps.
Speaking further on the recent Proshare Online Trading Report 2020 which showed that the the NSE market capitalization rose from N12.48trn in 2014 to N12.96trn in 2019. Oyewale was optimistic that the result showed positive growth despite the circumstances of the market.
On the recently constituted Products Advisory Committee for the Equities Market by the Nigeria Stock Exchange, Oyewale who is a member said that the objective of the committee is to enhance the quality of offerings in the market. He said it was an opportunity for the NSE to interact with capital market stakeholders in order to boost liquidity and deepen the breadth of the market.
A major thrust for the committee is continuous and active product development, increased awareness, innovation and investors' confidence key to the market.
He said the financial literacy technical committee was working under the Securities and Exchange Commission (SEC) and in line with Capital Market Master Plan 2015-2025 has been working diligently to improve capital market literacy in the country.
He added that the Financial Literacy Committee is focused on the youth and should be added into the curriculum and collaborate with universities to ensure their students are aware of financial literacy. The FLC is also working with leading agencies in the financial system, such as CBN, Pencom, FIRS in order to disseminate the knowledge of the market across Nigeria.
"At this time of the digital age driven by technology, there is a need to educate millennials on collective investment schemes such as investing in mutual funds and understanding the capital market in order to make the right investment decisions and avoid Ponzi schemes".
Speaking on Innovation, the equities market and boosting retail investor confidence he said, Nigerian innovators are aware of the series of developments in the market, which most stockbroking firms have been able to use to improve their platforms.