Foreign Investors Dominate Nigeria’s ETFs Market

June 23, 2021
ETFs market

By Aduragbemi Omiyale

The Exchange Traded Funds (ETFs) market in Nigeria is beginning to witness high patronage of investors, data from the Nigerian Exchange (NGX) Limited has revealed.

However, foreign participation dominated the ETFs market as 92 per cent of foreign investors’ outclassed domestic investors at 8 per cent.

One of the main reasons for the dominance of offshore in the market is because it provides an avenue for them to move their FX out of the country as the nation battles with a liquidity crisis.

In the first quarter of 2021, the market witnessed a 3,064 per cent rise in trade volume, lifting the market capitalisation to N20.324 billion.

Business Post gathered that the volume of trades recorded in the market in the period under consideration rose to 5.3 million units from 0.2 million units in the corresponding period of 2020.

In the NGX Quarterly report for Q1 2021, it was revealed that this gradual increase in interest in the ETF market started in early 2020 when the world was hit by the COVID-19 pandemic.

Analysis of the report revealed that market turnover (value traded) skyrocketed by a mammoth 4,556 per cent between Q1 2020 and Q1 2021 even as five of the listed securities were the most active during the period under review.

NewGold ETF took the lead in both value and volume traded in the ETF space as it traded 3.47 million units valued at N29.63 billion.

Vetiva Griffin 30 was next, trading 814,372 units worth N13.94 million, Lotus Halal transacted 746,400 units worth N9.95 million, Meristem Value ETF sold 163,09 units valued at N2.90 million while Vetiva Banking ETF traded 56,116 units valued at N232,397.

This means that over 5.25 million units were traded and valued at N29.656 billion in the period under review.

Further analysis revealed that 10 brokers drove 99.8 per cent of total transaction value and 96.6 per cent of total volumes of ETFs traded in Q1 2021.

Stanbic IBTC Stockbroker retains its top position in this category, having traded in stocks worth N88.2 billion between January and March 2021, representing 12.99 per cent of the total value of shares traded in the period under review.

Cardinalstone Securities followed on the list with trading in stocks valued at N47.36 billion, accounting for 6.97 per cent of the total value of shares traded in the first quarter of the year.

ABSA Securities Nigeria was next with its total trades valued at N41.53 billion in the period under review representing 6.12 per cent of the total value recorded in the stock exchange market while Rencap Securities also traded in stocks worth N35.81 billion, to stand fourth on the list as it accounted for 5.27 per cent of the recorded trades in monetary terms.

Aduragbemi Omiyale

Aduragbemi Omiyale is a journalist with Business Post Nigeria, who has passion for news writing. In her leisure time, she loves to read.

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