The promotion of online trading in the Nigerian capital market and increased efforts by stakeholders to create awareness about the market will go a long way in encouraging more retail investors to participate in the capital market, an expert has said.
The Former Regional Head, Public Sector, South-South and South-East for Ecobank Nigeria Plc and Chief Marketing Officer, Flobal Trust Limited, Mr. Abayomi Adeyeri, said in an interview in Lagos that it was also important for the government to create an enabling environment to encourage investment.
He said, “I think one major way to deepen the capital market is by making the trading and capital market investment environment more conducive. The promotion of online trading by the Nigerian Stock Exchange is a welcome idea. This will enable the retail end of the market to be more active and get a larger proportion of the investing public interested.
“It is also expected that the Securities and Exchange Commission, in collaboration with NSE, would create awareness among the general public and also assure Nigerians of the safety of their investments. The reduction in settlement time for the present T+3 to following day settlement (T+1) will also encourage the investing public.”
On the current volatility in the market, Adeyeri explained that the Nigeria capital market was largely driven by the activities of foreign investors who dominate it; hence their actions affected the market significantly.
“Therefore, as soon as there was a sign of naira devaluation in the last quarter of last year, the market went flat as a result of their exit to protect their investment and convert back to dollars,” he said.
Adeyeri explained that from the various workshops and seminars organised by Flobal Trust, it had become evident that many young Nigerians failed to plan for their future.
Although he admitted that the minimum wage of N18,000 was not ideal, he stressed that it was important for people to realise that if they could not save anything from the current minimum wage, they might as well be unable to save much from an income of N180,000.
This, he explained, was because people tend to follow the spending pattern of others as a result of the bandwagon effect.
Stressing that Nigerians must be disciplined financially, he said, “You need to first ascertain your financial location, then determine your financial destination, then choose a vehicle that can easily deliver you to your financial destination. The vehicle can range from investment in money market to capital market and real estate.
“However, the services of a financial expert may be required for a good foundation and roadmap for a lifetime financial freedom. In Flobal Trust, we are delighted to assist our clients to expand their worth with the experience of our investment experts.”
Adeyeri urged Nigerians to take personal finance more seriously, adding that his firm was committed to educating them on the importance of augmenting their needs as much as possible to “at least maintain a minimum rich ratio of 1”.
“Salary earners must always live below their means and ensure that they are rooted in aggressive savings. Consequently, they are advised to spend wisely, save regularly and invest prudently,” he said.
According to him, the vision of Flobal Trust is to build a world class investment institution with sustainable growth and to expand the worth of its customers by providing innovative investment advice always.
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Source : Punch