Retail Investors Increase Demand for Equities, Invest N106bn in one Month

Retail investors are now showing more interest in the Nigerian equities market as the amount they invested in January rose by 221 per cent from the figures of December 2017.

Although the overall transactions on the Nigerian Stock Exchange (NSE) decreased by 17.9 per cent to N394.44 billion in January compared with N480.80 billion in December 2017, domestic investors increased their stake in the market.

Specifically, domestic investors accounted for N228.05 billion, which is 57.82 per cent, while foreign investors transacted N166.39 billion or 42.2 per cent.

However, in comparison to January in 2017, total transactions increased significantly by 313.81 from N95.32billion recorded in 2017. Foreign investors conceded about 15.64 per cent of trading to domestic investors in the month of January 2018.

Total foreign transactions decreased by19.42 from N206.48 billion recorded in December 2017 to N166.39billion in January 2018.

Meanwhile, an analysis of transactions by domestic investors in January 2018, showed that retail investors accounted N106.49 billion out of the N228.05 billion. This indicates a growth of 221 per cent from N32.92 billion invested in December 2017. On the other hand, domestic institutional investors staked N121.56 billion, which is decline of 49.6 per cent from N241.40 billion invested in December 2017.

Market analysts said this growth in the domestic investors’ participation in the month of January 2018 is a good development that should be sustained. Despite having a population of over 180 million, those who invest in stocks in Nigeria are less than six million. This has led to calls on the capital market regulators and stakeholders to intensify enlightenment and investor education on the need to invest in the stock market.

The Chief Executive Officer of NSE, Mr. Oscar Onyema had said the exchange will increase its focus on growing retail participation as a key component of a well-functioning and resilient market.

“To this end, we will be partnering market stakeholders to deliver a number of financial literacy and investor outreach initiatives which align with existing plans as well as undertake new initiatives that can help drive a more radical change. At the crux of our efforts, is the establishment of a Retail Coverage Department, which will be dedicated to the development and publicity of simple, affordable and efficient investment products and services that can effectively support the Nigerian populace – at various stages of financial mobility – to create durable wealth,” Onyema said at the beginning of the year.

Also, the acting Director General of the Securities and Exchange Commission (SEC), Dr. Abdul Zubair, recent said the commission would achieve increased level of financial inclusion of Nigerians by the year 2020.
He stated this at a financial inclusion sensitisation campaign in Abuja recently.

Speaking through the Director, Market Development Department of the commission, Mr. Abdul Bello, financial inclusion as we all know is to ensure that various products at affordable costs are made available to the excluded.

“This is why we have carried this enlightenment campaign to Karshi so that the excluded will have an understanding of the available products in the Nigeria capital market. Our target is to have increased number of citizens to be financially included by the year 2020 and Because of the importance SEC and indeed stakeholders of financial inclusion attach to reaching out to the excluded, our sister organisations are here to equally give us brief on products that are available in other Financial Services Sector,” he said.

Source: Thisday