The Nigerian Stock Exchange (NSE) has renewed its commitment to promote diversity in investment, manage risk and make information readily available to all investors in the stock market.
The Chief Executive Officer, NSE, Mr. Oscar Onyema, explained that the retail investors still lack adequate knowledge of investment products and their benefits to them.
Onyema, who spoke at the 4th NSE’s Market Data Workshop covered by Nairametrics in Lagos on Wednesday, said that the low retail investment appetite event was conceived to educate investors on diverse opportunities in the market.
He said, “The challenge underscores the importance of creating product offerings that promote diversity in investment, manage risk and make the information readily available to consumers. Exchanges and Data vendors are already responding to this increasing demand using new tools for market data products.
“The workshop shines the spotlight on the need for a more inclusive collaboration among Capital market players, to analyse the information in market data and to inform the debate on the challenges of extracting this information from raw data to deliver a data product that is easily consumed to make an informed investment decision.”
On the growth potential of market data usage, the NSE boss added that there had been a global increase in the general consumption and spending on Financial Market Data and Market data analytics, stretching beyond the market data typically provided by stock exchanges for equity trading.
“Market commentators have estimated the value of total spending on all financial market data, analysis and news at about $28.5 billion; while the potential market size of financial information is valued at $50 billion, according to McKinsey estimates.
“Despite the evolving needs of consumers demanding for financial information globally, Nigeria still has low inclination towards investments, according to a research by First Securities Discount House, which reported the savings ratio in Nigeria as one of the lowest among selected countries like China, India, Kenya, Malaysia, South Africa, United Kingdom, and United States of America. The ratio of mutual fund assets to Nigeria’s GDP is also very low at less than 1%, despite the growth of mutual funds in the country in recent times.”
Commending the Onyema-led NSE, Lecturer, Department of Mathematics, University of Lagos, Dr. Mary Akinyemi, explained that the market was long overdue for greater participation of more retail investors.
“A lot of the investors find it difficult to interpret data and that hinders them from taking discerning investment decisions. The workshop underpins the need for the analysis of data to make it available in a format that is as disaggregated as possible in order to be easily consumed for investment purposes.
“The NSE is in a privileged position to benefit from its broad relationships with market participants to drive the delivery of our strategy. Our focus on innovative and disruptive solutions is built around our market data. We are innovating with “smart channels” that can deliver on-demand data to investors – including USSD, Mobile Apps, SMS and IVR.
“As an organization known for best practices, we are also adding new practices to our culture. We are taking on bold new initiatives to change the Capital Market narrative in partnership with our peers within the wider financial industry, we can say with all certainty that the future is bright,” Onyema added.