NSE links low retail investment appetite to inadequate knowledge of products, benefits

The Nigerian Stock Exchange (NSE) has said that a major reason for record low retail investment appetite is the inadequate knowledge of investment products and the associated benefits for retail investors.

Oscar Onyema, Chief Executive Officer, Nigerian Stock Exchange who noted this at the 4th NSE Market Data Workshop held in Lagos on Wednesday September 11 said this observation underscores the importance of creating product offerings that promote diversity in investment, manage risk and make the information readily available to consumers.

“Exchanges and Data vendors are already responding to this increasing demand using new tools for market data products”, the NSE CEO said at the workshop themed “Partnerships, Products and the Customer’’ which shined the spotlight on the need for a more inclusive collaboration among Capital market players.

Over the past editions of this workshop, the NSE has seen a heightened propensity for market information across a variety of users especially the investors.

“This is partly as a result of a growing awareness of the role of market data in investment decision-making. There is a growing interest in market information as it positions itself as a fundamental part of the larger value chain in Disruptive technologies for managing risk and creating new strategies”, Onyema said.

Globally, there has been an increase in the general consumption and spending on Financial Market Data and Market data analytics, which stretches beyond the market data typically provided by stock exchanges for equity trading.

Also, market commentators have estimated the value of total spending on all financial market data, analysis and news at about $ 28.5 billion while the potential market size of financial information is valued at $50 billion, according to McKinsey estimates. ,

Despite the evolving needs of consumers demanding for financial information globally, Nigeria still has low inclination towards investments, according to Lagos-based FSDH research, which reported the savings ratio in Nigeria as one of the lowest among selected countries including China, India, Kenya, Malaysia, South Africa, United Kingdom, and USA. The ratio of mutual fund assets to Nigeria’s GDP is also very low at less than 1percent, despite the growth of mutual funds in the country in recent times.

 

Iheanyi Nwachukwu