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NGX Leads West Africa in ETF Market Capitalization

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CEM REPORT, |MARKET | Nigerian Exchange presently leads other West African Exchanges in the Exchange Traded Fund (ETF) market capitalisation.

The NGX reports that its ETF market capitalisation presently stands at $ 19.25 million or N8.87 billion.

Although the NGX is leading the ETFs market in West Africa, the market is still in its nascent state compared to the South African ETF market with a $7.11 billion capitalisation.

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Speaking during the recently completed ETFs conference themed “ETFs in the Nigerian Capital Market: Opportunities and Challenges,” the Chief Executive Officer of the NGX, Temi Popoola,  assured that the market would see a renewal as four new listings were in the pipeline.

He noted that the exit of Foreign Investors impacted the ETFs space resulting in a sharp dip in the ETFs market Cap from 2020 highs of N24.5 billion.

“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 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 also stated that there are opportunities in every segment of the market and across the various asset classes if investors could analyze to understand where those opportunities are.

He stressed the need for investors to diversify and rebalance their portfolios, noting that it will go a long way to reduce the systematic risks in each asset class.

Also speaking at the event, the Executive Director, Central Securities and Clearing System (CSCS) Plc, Adeyinka Shonekan, stated that the CSCS is 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.*

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