NGX To Deepen ETFs Market With 4 New Listings

The chief executive officer, Nigerian Exchange Limited (NGX), Mr Temi Popoola has said, the Nigerian equities market would see a renewal in Exchange Traded Fund listings as four new ETFs were in the pipeline.

Popoola stated this at the recently completed ETFs conference themed ‘ETFs in the Nigerian Capital Market: Opportunities and Challenges’ held in Lagos.

The market capitalisation of Exchange Traded Funds (ETFs) listed on Nigerian Exchange Limited, amounted to N9.073 billion in the first quarter of 2021. This is according to the NGX monthly report for March, 2021.

There are 12 listed ETFs on the NGX, which includes; Greenwich Alpha ETF, Lotus Halal Equity ETF, Meristem Growth Exchange Traded Fund, Meristem Value Exchange Traded Fund, Newgold Exchange Traded Fund (ETF), Stanbic IBTC ETF 30, The SIAML Pension ETF 40, Vetiva Banking ETF, Vetiva Consumer Goods ETF, Vetiva GRIFFIN 30 ETF, Vetiva Industrial ETF and Vetiva S & P Nigeria Sovereign Bond ETF.

Exchange Traded Fund (ETF) is a type of investment fund and exchange traded product that tracks the performance of an index or a ‘basket’ of securities (such as shares, bonds, commodities).

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The NGX CEO explained that the Exchange is leading the ETFs market in West Africa with a market capitalisation of N8.87 billion ($19.25 million), noting that the market is still in its nascent state, compared to the South African ETF market with a $7.11 billion capitalisation.

According to Popoola, there has been a dearth of new ETFs listings on the NGX in recent years, however, there are bright spots on the horizon with four new ETFs listings in the pipeline.

“It is incumbent to state that current macro-economic 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,” he stressed.

The executive commissioner, Operations, Securities and Exchanges Commission (SEC), Mr. Dayo Obisan, urged all stakeholders including the Fund Managers Association, NGX, and other institutional investors to extend the message of ETFs in order to deepen the market and make the asset class more vibrant, thereby, driving growth in the capital market.

The executive director, Central Securities and Clearing System (CSCS) Plc, Adeyinka Shonekan, spoke on the CSCS’s developmental efforts in the ETFs market, explaining how the CSCS was 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,” he added.

The Nigerian Exchange is the leading ETF market in West Africa and one of the largest in Africa in terms of its listed products, turnover value and market capitalisation.