Nigerian Exchange Limited (NGX) remains committed to fostering the growth of the Nigerian capital market (NCM) through increased investor participation.
NGX made this known during a virtual Retail Investor Webinar tagged “Increasing Retail Participation Through Digitalization” in Lagos recently.
Delivering his opening remark, the Divisional Head, Capital Markets at the NGX, Jude Chiemeka, said retail participation in the capital markets has continued to soar across the globe over the years and attributed the increase to the technological advancements and digital innovations made especially during the COVID-19 pandemic.
Highlighting a 2021 report titled “The rise of newly empowered retail investors”, Chiemeka said that roughly, six million Americans downloaded a trading app in January 2021 alone, and retail brokerages witnessed record-high average daily volumes for equity and options trades.
“The increase in retail participation is also seen in the Indian stock market as active investor accounts increased by a record 10.4 million in India post-pandemic 2020.
While listing its efforts and strides to enhance investors’ participation in the NCM, Chiemeka noted that the Exchange is keen on collaborating with organizations with proven and reliable technological solutions in order to adapt to digital trends and technologies as well as innovate with new business models and products/services.
“An example of this innovation was experienced in December 2021, when the Exchange facilitated the public offer for sale of 575 million shares held in MTN Nigeria by MTN Group to investors particularly retail investors through the NGX PrimaryOffer app. The offer was priced at N169 per share and over-subscribed by 139.47 per cent.
The oversubscription led to the allocation of an additional 86.25 million shares by MTN totaling 661.25 million shares. A total of 126,720 retail investors submitted valid applications and received full allotment. More than 89 per cent of retail offer subscribers applied through the PrimaryOffer platform and 114,938 new Central Securities Clearing System accounts were opened by first-time investors”, he said.
According to him, this giant stride clearly shows the impact of digital transformation, allowing seamless and reliable market access for all categories of investors, including institutional and retail investors within and outside of the country.
“The importance of digitalization in the capital market to retail investors cannot be overemphasized as it would lead to increase in efficiency and improvement in financial literacy awareness of the market and its products.
The availability of various digital platforms (trading apps and portals) would provide retail investors the access to the market and convenience to execute trades themselves”, he said.
Chiemeka thereafter noted that the NGX will continue to leverage technology and collaborate with key stakeholders to increase retail participation in the NCM and remains committed to fostering the growth of the Nigerian capital market through increased investor participation.