NGX says collaborating with intermediaries to enhance affordability of investing, issuances

Temi Popoola, Chief Executive Officer, Nigerian Exchange Limited (NGX) has emphasised the Exchange’s commitment to further enhance the cost efficiency associated with capital market transactions.

Popoola highlighted that NGX is actively engaging with intermediaries to collaboratively drive improvements, ensuring a more cost-effective and efficient investment environment for both issuers and investors.

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He stated this while making a presentation at the 2023 MTN Capital Markets Day themed “Executing for Sustainable Growth.”

According to the CEO, the total cost of making an investment through the process of exiting could cost an investor as much as 2percent, which he stressed could be reduced to foster longer term play by market intermediaries.

“We are navigating this landscape by engaging our market intermediaries to explore how we can ease up these immediate expenses and shift perspectives to a longer-term focus.

“Leveraging technology to reduce this barrier to entry is also major on our agenda. A new issuance in our market today is relatively prohibitive compared to applying for a loan facility from the bank. Issuers can be assured we are working assiduously to improve that conundrum,” the NGX CEO said.

Recommending solutions to further deepen the capital markets, the NGX CEO underscored the importance of intentional government advocacy and policymaking.

“Historically, the major points of transformation in our capital market have mostly been because of government policy. The banking sector and pension reforms of 2004 are typical examples that have had dramatic effects on market growth.

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“Today, the financial services sector contributes over 60percent of turnover in the equities market. This would have been difficult to realise if not for that foundational policy that drove banks to recapitalise via the capital market. Equally, pension funds are significant liquidity contributors in our secondary markets. These and more are ways by which the government could drive growth in the capital market so it can perform its role as catalyst for economic development,” he said.