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NSE ETFs Assets Hit N4.26bn in Five Years



CEO of the Nigerian Stock Exchange (NSE), Mr
  • NSE ETFs Assets Hit N4.26bn in Five Years

The Nigerian Stock Exchange on Monday said the Assets Under Management of the eight listed Exchange Traded Fund stood at N4.26bn as at September, 2016.

The NSE Chief Executive Officer, Mr. Oscar Onyema, spoke at the ETF 2016 workshop organised by the bourse in partnership with Stanbic IBTC Asset Management, Lotus Capital and Vetiva Fund Managers Ltd. in Lagos.

An ETF is an investment vehicle that tracks an index, a basket of assets, or a commodity, but trades like regular shares on a stock exchange.

These investment vehicles allow investors a convenient way to purchase a broad basket of securities in a single transaction.

Onyema said that the figure represented a growth of 1,900 per cent when compared with AUM of N287.5m in 2011 when ETF was introduced on the Exchange.

He said, “As at today, we have recorded about 1,900 per cent growth in our ETF market with total AUM of about N4.24bn as at September 2016 on eight ETFs currently listed and traded on the Exchange.”

He said that ETFs were introduced on the NSE in December 2011 with cross listing of Newgold ETF with AUM of N287.5m to provide investors with new opportunities to diversify their portfolios and access the market.

Onyema said that the eight ETFs in the market are Newgold ETF, Vetiva Griffin 30 ETF, StanbicIBTC ETF 30, Lotus Halal Equity ETF, Vetiva Sector Series ETFs- Banking, Consumer Goods and Industrial, and Vetiva S&P Nigerian Sovereign Bond ETF.

He explained that the Exchange had six equity backed ETF, one commodity ETF, and one bond ETF.

He said that global ETF AUM had grown to $3tn within five year in April, 2016 from $1.4tn in December 2010, representing a growth of over 102 per cent.

He said, “Experts have predicted the continued growth of the ETF industry, estimating that global AUM will reach at least seven trillion dollars by 2021.”

The NSE chief said that currently, there were about 506 ETF investors in the market.

He, however, expressed optimism that “the growth of ETFs in Nigeria has only just begun with the support of market intermediaries, stakeholders and our regulator”.

Onyema said that the existence of ETFs in the Nigeria market was beneficial to retail and institutional investors, as ETFs offer a direct and inexpensive way to attain diversified exposure to an index, commodity, sector or region.

He said ETFs also offer additional benefits of low expense ratio compared to mutual funds, increased liquidity.

Onyema said that this could be used to execute different investment strategies asides from diversification and tradability.

He further said that the workshop was organised to create awareness of the product, address its challenges and promote the opportunities in Nigeria and Africa.

He said, “The Exchange remains committed to partnering with all market stakeholders, to continue to build and develop the Nigerian capital market, while offering a wide range of investment vehicles for all investors.”

The Executive Director/Head, Sub-Saharan Africa Client Coverage Team, MSCI, Mr. Gareth Allison, said that ETF aids investors to diversify their diversification.

Allison said that MSCI would aid the Exchange to develop and transform its ETF market.

He said, “We want to help investors to utilise opportunity in the market and make maximum return.”

On the Fundamental of Market Indices, Allison said that investors need to understand the underlying assets before investing in any market.

He said that indices were very important in investment decision, and as well used as policy benchmark.

He said, “Market is revolving, investors are revolving too, and we are faced with behavioural investors.”

In her comments, Ms. Nerina Visser, ETF Strategist and Advisor from South Africa, said that market regulators needed to know the type of ETFs to develop to ensure investors patronage.

Visser said that market markers were needed to act as liquidity boosters for ETF to thrive in any market.

She said that South Africa had the highest market for the product with 74 Exchange Traded Products across all asset classes.

Visser added that market should come out with specific investors’ needs in the establishment of ETF.

She also said that regulators should consider reducing trading fees for ETF to increase patronage.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth



Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans




CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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FMDQ Approves Valency Agro’s N5.12bn Commercial Paper




FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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