The Chief Executive Officer, Nigerian Exchange Ltd. (NGX), Mr Temi Popoola, says there will be a renewal in Exchange Traded Fund (ETFs) listings, as four new ETFs were in the pipeline.
Popoola said this at the 2023 ETFs conference with the theme: “ETFs in the Nigerian Capital Market: Opportunities and Challenges”, held in Lagos.
In his remark, Popoola explained that the Exchange currently leads the ETFs market in West Africa with a market capitalisation of N8.87 billion (19.25 million dollars).
According to him, the Nigeria ETF market was still emerging, compared to the South African ETF market with a 7.11 billion dollars capitalisation.
“There have been 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 N24.5 billion.
“We are hopeful that the policy tilt of the new administration would impact positively on our market,” Popoola said.
Also, Mr Dayo Obisan, Executive Commissioner, Operations, Securities and Exchanges Commission (SEC), urged all stakeholders to extend the message of ETFs to deepen the market.
He listed stakeholders to include the fund managers association, NGX, and other institutional investors.
Obisan said that would make the asset class more vibrant and drive growth in the capital market.
Mr Adeyinka Shonekan, Executive Director, Central Securities and Clearing System (CSCS) Plc, said that the CSCS’s had contributed to develop the ETFs market.
Shonekan explained that the CSCS was 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.
Commenting, Mr Adele Hattingh, Manager, Business Development and Exchange Traded Products, Johannesburg Stock Exchange (JSE), gave an overview of the South African ETFs market and why investors should consider investing in the asset class.
On her part, the Managing Director, Vetiva Fund Managers Ltd, Ms Oyelade Eigbe, explained how retail investors could access the ETFs market in Nigeria and monitor their investments.
During the panel session, capital market experts addressed the opportunities and challenges of the market, with liquidity as a central topic of discussion.
Discussants at the panel were Mr Aigbovbiose Aig-Imoukuede, President, Fund Managers Association of Nigeria (FMAN), Mr Oladele Sotubo, CEO, Stanbic IBTC Asset Managers, FBN Quest Capital and Mr Nornah Awoh, Chief Equity Analyst/CEO, Palesa Capital Markets Associates.
