The Nigerian Stock Exchange (NSE or The Exchange) engaged with Exchange Traded Funds (ETFs) Issuers’ in the Nigerian capital market consistent with its commitment to deepen activities in the segment on Wednesday, 3 March 2021. The virtual session highlighted key development areas for the market specifically in terms of product issuances, market liquidity, regulatory landscape and capacity building.
Speaking at the event, the Divisional Head, Trading Business, NSE. Mr. Jude Chiemeka noted that, “Exchange Traded Funds (ETFs) are one of the fastest-growing capital-market investment vehicles in advanced economies, offering transparency, liquidity, diversification, and lower costs. For an emerging market like Nigeria, the ETF marketplace represents a meaningful opportunity to support the development of domestic capital markets, leading to greater price transparency, investor diversification, and liquidity across a wider range of instruments. Today, the NSE prides itself in its position as the second-largest ETF market in Africa with a market capitalisation of ₦24.5 billion as at 31 December 2020, up by 270% from 2019’s market capitalisation.”
The market witnessed significant increases in traded values and volumes (i.e., 218.0% and 51830.6% respectively between 2019 and 2020) owing to increasing adoption of ETFs, new product issuances, fungibility of some of the listed funds. Since 2011, the supply-side has deepened from a single ETF tracking the price of Gold to 12 ETFs currently offering exposure to equities, fixed income, commodities including Newgold ETF; Vetiva Griffin 30 ETF; Lotus Halal Equity ETF; Stanbic IBTC 30 ETF; Vetiva Banking ETF; Vetiva Consumer Goods ETF; Vetiva Industrial ETF; Vetiva S & P Nigeria Sovereign Bond ETF; The SIAML Pension ETF 40; Greenwich Alpha ETF; Meristem Growth ETF; and Meristem Value ETF.
While there have been improvements in the market, The Exchange remains committed to collaborating with stakeholders to deepen the existing suite of available investments as well as improving the general landscape of the market.