There are about three million retail investors in the Nigerian capital market, less than half a per cent of the country’s 190 million population.
Divisional Head, Trading Business, Nigerian Stock Exchange (NSE), Mr Jude Chiemeka, said the Nigerian capital market has about three million retail investors, a rather discouraging participation level considering the vast potential and population of the country.
According to him, less than three per cent of Nigeria’s total adult population participate in the stock market, underscoring the need to improve financial literacy and investment education.
Speaking at the maiden retail investor workshop at the Exchange in Lagos, Chiemeka said the Exchange recognises the need to improve investor participation and it is leveraging recent capital market initiatives as well as promoting the introduction of globally competitive investment products with low entry thresholds to achieve financial inclusion goals.
“Nigeria has a population of over 190 million people and is the second largest economy in Africa. However, the current financial inclusion indices of 48 per cent leave much to be desired. Financial inclusion is a priority of stakeholders in the capital market, and the Nigerian Stock Exchange makes it a primary concern to contribute towards the achievement of Nigeria’s National Financial Inclusion Strategy of reducing the proportion of adult Nigerians that are financially excluded to 20 per cent in the year 2020,” Chiemeka said.
He said the Exchange has been hosting series of investment workshops to provide vital and strategic information targeted at equipping existing and prospective investors with useful skills to effectively manage and grow financial resources at their disposal, as well as present retail investment opportunities available in the capital market.
According to him, these initiatives have begun to yield positive results as the market has in recent times witnessed an upturn in retail investor participation. Market data from 2019 shows that retail investors outperformed institutional investors by eight per cent in January, and again by two per cent in March 2019.
He said the retail coverage department of the NSE would be rolling out measures directed at encouraging retail investor involvement in the capital markets.
“Over the next few years, various investment workshops will be held across the country, starting with this one here in Lagos. Investors can look forward to regular engagements targeted at promoting financial literacy, building investor confidence, as well as the introduction of innovative and technology driven solutions to stimulate investor participation,” Chiemeka said.
He outlined that retail investors would be exposed to bouquet of products and services tailored to cater to different investment and risk appetites and knowledge that will help to create a better understanding of the opportunities in the market.