The Nigerian Capital Market has a crucial role to play in helping to boost the foreign exchange reserves of the country.
The President and Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Dr Ken Opara, disclosed this at the Retreat of the Senate Committee on Capital Market.
He said, “A viable market attracts foreign investments, and this leads to the inflow of foreign exchange into the economy. This can further help in stabilising the currency thus making it more attractive to foreign investors.
“You will all agree with me that our dear country needs such inflows, particularly at this crucial time.
“The aforementioned and many more are the benefits of the Nigerian Capital Market in contributing to the overall growth and development of our economy. I believe that the responsibility for the growth and development of our economy cannot be left in the hands of the government alone”.
He added that the private sector also has a pivotal role to play. Hence, the need for every Nigeria to pay critical attention to the state of the Nigerian capital market and that this will help to examine its current performance and seek ways to improve its contribution to the nation.
“In terms of its performance, the Nigerian capital market has demonstrated remarkable resilience and robustness in recent years. The insights gleaned from the 2023 report by Price Waters Coopers underscore the market’s ability to thrive amidst dynamic economic conditions.
“The year 2023 was rosy for capital market investors, for instance the Nigerian equities market gained N11.734 trillion as of December 14, 2023, from N27.915 trillion at the beginning of 2023 to close at N39.649 trillion as at December 14, 2023.
“The Nigerian Exchange (NGX) Limited All-Share Index (ASI) rose by 41.37 per cent from 51,251.06 points on December 30, 2022 to 72,455.83 points on December 14, 2023.
“It may interest you to note that between January 15 and 17, 2024, the NGX gained a significantly when the market appreciated by 20.45 per cent, which makes it the fastest-growing equities market globally, outperforming the Argentine Stock Market.
“This growth trajectory is a testament to the market’s ability to attract capital inflows and create wealth for investors.
Similarly, the FMDQ Group Plc has evolved over the years from an OTC Market to a being a vertically integrated financial market infrastructure group warehousing five wholly owned subsidiaries.
“Its Average Annual Market Turnover stands at N177.49 trillion with 834 Listed/Quoted/Noted Corporate Debt Securities valued at N7.87 trillion and 473 Listed/Quoted Federal Government of Nigeria Debt Securities valued at N139.24 trillion.
“In addition, as of November 2023, the total value of Commercial Papers (CPs) quoted on FMDQ Exchange amounted to N77.40 billion. This figure represents a notable month-on-month increase of 112.00 per cent from the value recorded in October 2023, signalling the market’s growing attractiveness to companies seeking capital and investors in search of diverse investment opportunities”.
As Nigeria continues to position itself as a preferred destination for investment, the NGX Group and FMDQ Exchange serve as vital platforms for facilitating capital formation, fostering innovation, and driving sustainable growth across various sectors of the economy.
“The role of the Securities and Exchange Commission (SEC) in shaping the Nigerian capital market landscape also remains very crucial. Through proactive reforms and strategic initiatives, the SEC has played a pivotal role in strengthening the regulatory framework and enhancing investor protection mechanisms.
“To position the Nigerian capital market as a key market in Africa, SEC developed a 10-year (2015 – 2025) Nigeria Capital Market Master Plan (CMMP) in 2015 which was later revised in 2021.
The CMMP is the blueprint that positions the Nigerian capital market as an efficient and internationally competitive market.
Clearly, the sector has also undergone technological advancements such as the adoption of electronic trading platforms like the X-Gen trading platform, have revolutionized trading operations within the capital market.
These platforms have streamlined processes, enabled faster order execution, and enhanced market transparency, thereby improving overall efficiency and accessibility for market participants.
This development is in perfect alignment with my FUTURE agenda as the 22nd President/Chairman of Council of The Chartered Institute of Bankers of Nigeria, where we emphasise ‘Financial Innovation and digital Transformation’ as key to navigating the complexities of the modern financial landscape.
He stressed that the CIBN is collaborating with the Nigerian Exchange Limited (NGX) on capacity building initiatives aimed at empowering and enhancing the skills and knowledge of participants within the ecosystem.
Such collaborative efforts, he said, “underscore our mutual commitment to promoting professionalism, ethical standards, and best practices within the financial services sector, and ultimately contributing to the growth and development of Nigeria’s capital market ecosystem. I am also glad to share with you that presently one of the goals of our revered Institute is to deepen our partnerships with other Exchanges that operate in Nigeria to further enhance the growth and development of the Nigerian financial market and promote ethical business practices in the Nigerian Capital Market”.
Read the full article here
