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Experts, Stakeholders Spend $28.5bn on Market Data



capital market
  • Experts, Stakeholders Spend $28.5bn on Market Data

The growing demand for financial market data, expert analysis and news has created an industry presently valued at about $50 billion, according to McKinsey.

Chief Executive Officer of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, disclosed this at the fourth edition of the NSE Market Data Workshop in Lagos.

According to him, there has been a surge in global consumption of financial data and spending on market data analytics beyond the one provided by the Nigerian Stock Exchange.

Onyema explained that the amount spent on all financial market data, analysis and news stood at about $28.5 billion.

He stated: “Market commentators have estimated the value of total spending on all financial market data, analysis and news at about USD28.5 billion; while the potential market size of financial information is valued at USD 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 a research by FSDH, 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 Gross Domestic Products (GDP) is also very low at less than one percent, despite the growth of mutual funds in the country in recent times.”

He, therefore, explained that one of the reasons for the low retail involvement in the financial market is lack of adequate knowledge of investment products and benefits for average retail investors.

According to him, “This 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.”

He stated further: “At the NSE, we believe in customer-centricity and we continue to foster partnerships with local stakeholders across the market, incorporating new technologies and expertise to drive market data by-products like derivatives and other structured products such as the Exchange Traded Funds.

“These structured products, which are based on the accuracy of the underlying stock prices are being used by a broader set of professional users than those who participate on the stock exchange directly – to advise, monitor and/or validate transactions after they are executed.”

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.