By Olatunde Dodondawa
The Chief Executive Officer, Nigerian Exchange Limited (NGX), Mr Temi Popoola, said that the market would see a renewal in Exchange Traded Fund listings as four new ETFs were in the pipeline.
This was echoed by Popoola at the recently completed ETFs conference themed “ETFs in the Nigerian Capital Market: Opportunities and Challenges” held on Wednesday, 19 April 2023. Giving his remarks, the CEO explained that the Exchange is leading the ETFs market in West Africa with a market capitalisation of N8.87bn ($19.25m), noting that the market is still in its nascent state, compared to the South African ETF market with a $7.11bn capitalization.
“There has been a dearth of new ETFs listings on the NGX in recent years, however, there are bright spots on the horizon with 4 new ETFs listings in the pipeline. It is incumbent to state that current macroeconomic challenges resulting in the exit of Foreign Investors, impacted the ETFs space, resulting in a sharp dip in the ETFs market Cap from 2020 highs of N24.5bn. We are hopeful that the new administration’s policy tilt would positively impact our market.”
Also speaking at the event was the Executive Commissioner, Operations, Securities and Exchanges Commission (SEC), Mr. Dayo Obisan, who also touched on the challenges in the market but 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 in order to deepen the market and make the asset class more vibrant, thereby driving growth in the capital market.
Adeyinka Shonekan, the Executive Director, Central Securities and Clearing System (CSCS) Plc spoke on the CSCS’s developmental efforts in the ETFs market. He explained how 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.
Adele Hattingh, Manager, Business Development and Exchange Traded Products at the Johannesburg Stock Exchange, JSE, gave an overview of the South African ETFs market including why investors should consider investing in the asset class. 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. Featuring were Mr 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.
