By Chinenye Anuforo and Chinwendu Obienyi

Over the years, the Nigerian stock market has experienced volatility partly, due to the low level of domestic participation.

It can be said that the country boasts of a population of about 180 million people but those who invest in stocks are less than five million. Although retail investors have access to the new technologicaly financial products, some investors are still bereft of the knowledge of how the products work.

It is evident that one of the barriers to increasing participation of retail investors is low financial literacy and despite the level of domestic transactions, which increased by 42.1 per cent from N355.2 billion in the first half of 2016 to N505 billion in 2017, there is more work to be done to raise the bar.

The Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Patrick Ezeagu, said the key to driving patronage at the capital market is zero tolerance to market infractions, use of technology to drive the revolution in the market, policy consistency and investor education.

“Part of the policy measures to protect investors are zero tolerance to infractions, investors protection fund, robust complaints management framework, and to attract patronage in the capital market, one needs the use of technology to drive the revolution taking place in the market, policy consistency and investor education to ensure investors patronise the market,” he said.

Speaking at its 2nd quarter Capital Market Committee (CMC) meeting in Lagos recently, Director General of Securities and Exchange Commission (SEC), Mounir Gwarzo, revealed that it was partnering the Nigerian Educational Research and Development Council (NERDC) to re-introduce the culture of savings in schools’ curriculum.

“Statistics show that people from the age of 20-35 are actually not investing in the capital market as only people from the range of 34-65 are the ones that have a stake in the capital market. So we need to cultivate the culture of investment from that level of youth and we are collaborating with NERDC to develop a curriculum on capital market studies to be taught in primary and secondary schools,” he explained.

As part of efforts to boost capital market literacy, the Nigerian Stock Exchange (NSE) recently launched a knowledge platform, X-Academy, which offers bespoke capital market training programmes to equip individuals who will lead and transform businesses for sustainable growth.

At its launch, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, said: “X-Academy would help in strengthening financial literacy and enhancing investment in the capital market. It will offer a wide range of courses geared towards bridging the knowledge gap of dealing members, issuers, investors and the general public about products and services of the capital market.”

Related News

He stated that the establishment of X-Academy is consistent with NSE’s tradition of pioneering far-reaching innovations within the Nigerian capital market, adding that the product feeds directly into the National Financial Inclusion Strategy (NFIS) launched by the Federal Government in 2012 to reduce the number of adult Nigerians who were financially excluded, from 46.3 per cent in 2010 to 20 per cent by 2020.

He further said, “as a socially responsible organisation devoted to enhancing the fortunes of Nigerians and our investors, we are confident that participants of programmes offered by X-Academy will be better positioned to make informed financial decisions.”

The programmes offered are built around six broad themes including Listings and Trading on the NSE, Products of the NSE, Market Data and Technology, Financial Education, Corporate Governance, and Risk Management and Compliance.

In continuation of its efforts to deepen retail investors’ participation, the NSE last week organised another investor clinic to educate capital market stakeholders on ‘The Role of Dematerialisation, Direct Cash Settlement and E-dividend in the development of the Nigerian Capital Market.”

The investor clinic was targeted at sensitising the investing public and brokerage community of contemporary initiatives in the market.

That edition of the clinic shed light on the importance of dematerialisation as a necessity in the trading of shares. Participants were also made to understand the advantages of direct cash settlement and e-dividend processing in the consolidation of returns on their equity investment as well as the overall benefits to the Nigerian capital market.

Speaking at the event, Executive Director, Market Operations and Technology, NSE, Ade Bajomo, said “the NSE investor clinic brings to the fore the importance of dematerialisation in ensuring improved market velocity and integrity as well as the role of direct cash settlement in enhancing investor confidence by ensuring that proceeds from the sale of securities are remitted directly into investors’ accounts”

 He stressed the importance of e-dividend in not only reducing the perennial issue of unclaimed dividend growth but in ensuring that investors derive the full benefits of their investments by having their dividends paid directly into their bank accounts as soon as these are disbursed by issuers, regardless of whether these are savings or current accounts.

According to him, “the NSE is committed to improving overall financial literacy and inclusion in the country, and ensuring we implement efficient processes that provide investors easy and intuitive access to grow their wealth. This commitment is expressed in the various initiatives undertaken by the Exchange.

“In 2016 alone, we executed over 200 free capacity building workshops aimed at enhancing investor understanding of the workings of the capital market. The multiplier effect of these workshops are phenomenal, as over 25,000 participating investors have been equipped to make better investment decisions,” Bajomo said.