At $19.25m Market Cap, NGX Leads Other W’African Exchanges in ETFs

Kayode Tokede
Currently, at $19.25million or N8.87billion, the Nigerian Exchange Limited (NGX) has disclosed that it currently leads other West African Exchanges in the Exchange Traded Fund (ETF) market capitalisation.

This was disclosed by Chief Executive Officer, NGX, Mr. Temi Popoola during the recently completed ETFs conference themed “ETFs in the Nigerian Capital Market: Opportunities and Challenges.”

He noted that the market is still in its nascent state, compared to the South African ETF market with a $7.11billion capitalization and the market would see a renewal as four new ETFs were in the pipeline.

According to him, “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 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 N24.5billion.
“We are hopeful that the policy tilt of the new administration would impact positively on our market.”

Also speaking at the event was the Executive Commissioner, Operations, Securities and Exchanges Commission (SEC), Mr Dayo Obisan, who also touched on the challenges in the market but expressed confidence in the ability of experts to proffer solutions. He 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 who spoke on the CSCS’s developmental efforts in the ETFs market, said the CSCS is using technology to improve the onboarding of retail investors into ETFs.
According to him, “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 Manager, Business Development and Exchange Traded Products at the Johannesburg Stock Exchange, JSE, Adele Hattingh gave an overview of the South African ETFs market including why investors should consider investing in the asset class