Tuesday, January 24, 2017 6.08 PM / NSE
It gives me great pleasure to welcome you to The Nigerian Stock Exchange (The Exchange) for the Facts Behind the Listing Presentation of SIAML Pension ETF 40. On behalf of the Council, Management and Staff of The NSE, I congratulate the Board and Management of StanbicIBTC Asset Management Limited (SIAML) on the successful IPO of their second ETF, which recorded about 60% subscription. I also congratulate SIAML for the subsequent listing on our bourse.
Today, The Exchange is admitting to its daily official list 5.97 million units of SIAML Pension ETF 40 at a par value of N100 per unit and the issuer has appointed Stanbic IBTC Securities Limited (SISL) as Liquidity Provider to facilitate secondary market liquidity on the product. SIAML Pension ETF 40- the first Exchange Traded Fund (ETF) to replicate our NSE Pension 40 Index (one of our thematic indices) is designed to track the price/yield performance of the Index.
The NSE Pension 40 Index launched in July 2015 contains top 40 companies in terms of market capitalization and liquidity that conform to PENCOM regulations on investment of pension fund assets in listed equities. The NSE Pension 40 Index is a total return index rebalanced once in a year (on the first business day in January) and so investments products replicating it are expected to record lower transaction/rebalancing cost therefore minimizing tracking error.
We celebrate with SIAML and applaud the entire team for maintaining her market position in Nigeria’s Asset Management Industry with an enviable track record of excellence and competence. The listing of SIAML Pension ETF 40 which marks our first listing in 2017, lends credence to our commitment to championing and advocating for growth of the ETF market in Nigeria. With diversified investor base, our market offers issuers and their products access to capital and visibility whilst delivering transparency and liquidity to investors.
The history of ETFs globally dates back to 1990 and they have now become one of the most popular investment vehicles with increasing demand from global retail and institutional investors. The Global ETF industry continues to extend its stunning track record of expansion with over 102% cumulative growth over the last five years, and assets under management (AUM) has been forecasted to reach Page 2 of 2 US$6tn by the end of 2020.
The ETF market in Nigeria was launched in December 2011 on the NSE with cross listing of Newgold ETF and today we are have become the second largest (and fastest growing) ETF market in Africa boasting of additional eight indigenous ETFs with AUM totalling about N5.4bn and over 200% cumulative growth in turnover over the last four years; a feat we have all achieved, together through unwavering diligence and determination to grow this segment of our market.
Although we are yet to attain our desired goals, we believe today’s listing will further catalyse exponential growth in our market. The Exchange will continue to support the growth of ETF market through our dedicated Product team working with existing and potential issuers to expand product universe, promote liquidity and transparency on product structures through appointed liquidity providers who are obliged to provide bid and ask prices for defined percentage during trading session, and increase product awareness through our annual ETF seminars/workshops as well as publishing a wide range of educational resources on our website and different media platforms.
It is against this backdrop that I wish to encourage fund managers to take advantage of available opportunities by partaking in and contributing to the growth of ETF market through product innovations that meetsinvestors’ needs and appetite.
I encourage investors to take advantage of the benefits presented by investing in ETFs such as lower cost, diversification and liquidity. I also urge fund issuers to continually make available educative promotional materials on ETFs that will help investors make informed decisions. Once again, I commend all parties to the issue, the board and management of StanbicIBTC Asset Management Limited, and the Secondary Market department of the Exchange on this milestone event. Thank everyone else who has provided support in making today a reality.
The Exchange promises to continue its collaboration with market stakeholders- Regulators, Dealing Member Firms, Fund Managers, Issuing Houses, etc to collectively promote increased awareness and education on ETFs amongst the investor community in Nigeria. As we deliver on several market development initiatives in 2017, we aim to become the African Exchange of choice for issuers and investors by enhancing regulation, transparency, liquidity and accessibility to capital and a wide product range.
Oscar N. Onyema, OON
Chief Executive Officer
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