Basking in the euphoria of the recent launch of its online trading platform, Trade Smart, the Nigerian Stock Exchange (NSE) says the new initiative will bring investments worth N1.5trillion into the capital market in one year.
According to its Executive Director, Market Operations and Technology, Mr. Ade Bajomo, the anticipated investments are based on the demography of the nation and its working population:
“To be conservative, let’s say 25 million individuals represent the working population in Nigeria and each individual sets aside N5,000 monthly. In 12 months, a total amount of N1.5trillion will have been invested in the stock market. And with a 1.35 per cent charge on transactions, brokerage firms will have a cumulative gross income of N20.25 billion”, he said.
Bajomo explained that through the trading applications, investors would have instant information to aid investment decisions to make the market more effective, adding that the thrust of TradeSmart is to make the market more accessible to 25million people and boost financial inclusion in the country.
Financial Inclusion is a state where financial services are delivered by a range of providers, mostly the private sector, to reach everyone who could use them. Specifically, it means a financial system that serves as many people as possible in a country.
He explained that the launch of the online trading will enable Nigerians resident in remote villages across the country play the market with their moble phones. Rolling out statistics to support this, Bajomo said:
“In 2,000, Nigeria had just under 200,000 internet users. In 2007, that number shot up to 10million.In 2010, we reached about 43million.We are currently at over 55million subscribers. Active Internet subscriptions (GSM) between August 2013 and July 2014, according to the Nigerian Communications Commission (NCC) data, shows that 47 per cent of phones are Internet enabled; average surfing hours per day is three hours; two-thirds are male, three quarters are aged between 19 to 35years; four out of 10 are students; one third access the Internet via PCs (personal computers) and eight out of 10 active users are active on social media. What drives the market is that everyone participates, operates and nurture his or her investment. The applications will provide users real-time market data with availability of various technical indicators to analyze the trend and momentum of the market. At the end of the day, they will make informed decisions based on the latest data,” he said. Addressing the fear that the platform would erode the functions of brokers and take away their jobs, he stated:
“Online trading will free up the brokers and move them to the value chain; make them to help package this kind of initiative; send them out to the grassroots to promote financial inclusion and give them the time and opportunity to deliberate with the government on what is needed to be deliberated upon. It will also bring out more transparency and grow the market.”