September Surge: Retail Investors Propel Equity Market, NGX Reports 35% Boost

Infostride News reported that the retail participation in equity markets within Nigeria has experienced a notable increase, rising from 28% in 2022 to an impressive 35% as of September 2023. This information was revealed by Jude Chiemeka, the Executive Director of Capital Markets at the Nigerian Exchange Limited (NGX), during the NGX RegCo Retail Investor Workshop. The event, held virtually, centered around the theme “Expanding Reach for More Impact: Deepening financial inclusion in the retail investor.”

Chiemeka attributed this surge in retail participation to enhanced access and the widespread adoption of technology in the financial landscape. He specifically highlighted the transformative role played by tools such as X Mobile, emphasizing how they have revolutionized the world of investing for all stakeholders involved. Recognizing the importance of fostering a market that provides equal opportunities for everyone, Chiemeka emphasized that achieving Nigeria’s ambitious 95% financial inclusion target by the end of 2024 hinges on deepening financial inclusion.

“At NGX, we believe that by deepening financial inclusion, we can unlock the true potential of retail investors and ensure they have the tools, knowledge, and support to achieve their financial goals,” said Chiemeka. “It is important to take a moment to acknowledge the remarkable growth of retail investors in the Nigerian Capital market in recent years.”

To further instill confidence in retail investors, Mr. Abimbola Babalola, the Market Head of Market Surveillance and Investigations at NGX RegCo, assured them of the commitment to ensuring fairness and transparency in the capital market. He outlined the regulatory mandate of NGX Regulation, emphasizing its focus on investor protection.

“In order to achieve this, at NGX RegCo, we ensure that all our rules are properly documented with interpretative guidelines issued alongside them,” explained Babalola. “By going through these, everyone participating in the market will understand the rules and how it is being operated. Most of what we do in the market is fully automated. For example, the trading engine has an algorithm devoid of human elements. We ensure that every participant observes the rule of the exchange, and we have technology-driven methods of detecting unscrupulous elements trying to take advantage of the market.”

The commitment to transparency and investor protection aligns with the broader goal of fostering financial inclusion in the retail investor ecosystem. Babalola’s emphasis on automation and technological safeguards reflects the growing reliance on advanced systems to maintain market integrity.

Providing insights for retail investors, Peter Omoregie, the Managing Director of CardinalStone Securities Limited, urged them to set clear financial goals when entering the capital market. He emphasized the importance of understanding the risks involved and assessing one’s risk tolerance. Omoregie suggested asking critical questions such as “What do you have available in terms of resources to invest in and what kind of returns do you need to make?”

This advice from Omoregie underscores the significance of informed decision-making and strategic planning in navigating the complexities of the capital market. As retail investors play an increasingly prominent role, equipping them with the knowledge and tools necessary for sound financial decisions becomes imperative.

In conclusion, the rise in retail participation in Nigeria’s equity markets, as reported by Infostride News, highlights the evolving landscape of the country’s financial sector. The commitment of NGX and its regulatory arm, NGX RegCo, to ensuring fairness, transparency, and investor protection underscores the collaborative efforts to foster financial inclusion and empower retail investors. As technology continues to shape the future of finance, the market’s embrace of automation and advanced surveillance methods reflects a forward-looking approach to maintaining market integrity and instilling confidence in all participants.