Zimvest Economy Conversations: Financial experts call for reorganization
of Nigeria’s market architecture.
Stakeholders in the Nigerian Capital market, Asset Management and
Banking Industries have called for a rethink of the nation’s Economic
philosophy and a reset of the financial market architecture. This was
part of the major takeaways from the “Zimvest Economy Conversations”, a
thought-leadership series of Digital Private Wealth and Investment
Management Firm, Zimvest (Zedcrest Investment Managers) held on
Saturday, June 20, 2020.
Giving the opening remark during the virtual event, Business Head of
Zimvest, Gbenga Adigun, noted that investors are gravely concerned with
investment returns in light of the current low yield environment while
financial institutions are thinking of how their product development and
service delivery should evolve with the changing needs of investors.
Bola Onadele Koko, CEO of FMDQ Group while delivering the keynote speech
on the event theme “The Economic Landscape and Investor Preferences in
Post-pandemic Africa”, talked about the toll the growing pandemic has
had on African markets. He laid emphasis on the slow down in key
segments of the economy including the financial markets, tourism,
remittances and foreign direct investments. He called for a rethink of
Nigeria’s economic philosophy with clarity from the fiscal policymakers
which will be critical for gaining investors’ confidence.
According to him, “Now is the time to develop new and ingenious ways to
develop and drive the Nigerian financial market and in the continent at
large. Private capital will especially be more essential as recent
shocks have shown the limits of Governments’ abilities particularly in
developing countries”, he said.
The capital market leader also stated that FX reforms will be critical
for the Nigerian economy at this point; noting that trading activity in
the Nigerian Fixed-Income and Interbank Currencies market is down by 55%
due to economic slowdown linked to the Covid-19 pandemic.
All panelists in this first episode of the thought-leadership series
pointed out that most investors were affected by the pandemic and are
looking for further ways to diversify their portfolios that may end the
year on a negative real return.
Speaking during the panel session, Abiola Adekoya, Wealth Expert and
Ex-CEO at RMB Securities, stated that one of the key things that
investors are concerned about in this era is the need for
diversification, more liquidity and higher investment returns.
In her words: “A lot of investors have been focused on one product and
this pandemic has shown that that is not enough. The nascent interest in
alternative assets have shown that there is strong liquidity in the
overlooked retail space and Investment managers should pay keen
attention and develop alternative assets products, and reduce the
reliance on the traditional Fixed income, Money markets and Equities
Buttressing Abiola’s position on alternative assets, Esiri Agbeyi,
Partner and Head Private Wealth Services, PwC Nigeria, emphasized the
need for investors to take keen interest in private equity and other
alternative assets investments. She shared a PWC survey on Family
Offices. The survey revealed that 63% of family businesses leaned
towards private equity as an investment portfolio. Local pools of
private capital are important to drive economic development.
Onome Komolafe, Divisional Head of Central Securities Clearing System
(CSCS), stated the need for improved product development and
differentiation, clear market segmentation and smart communication as
tools that financial services firms can deploy in evolving with the
changing consumer behaviour. She also pointed to premium service
delivery and technological innovation as crucial to democratization of
investment opportunities in Africa.
The Group Executive, Treasury & Financial Institutions at First Bank,
Ini Ebong, pointed out the present opportunity available for investors,
regulators, institutions, market practitioners to reset Nigerian
financial market architecture. He noted that this opportunity presents
itself mostly around periods of crisis.
According to him, as markets develop, the investing public becomes more
able to embrace risk and go for higher return instruments outside
traditional bank-based deposits.
“If you want high returns on investment, you must be willing to take on
more risky investment products”, said Adetoun Dosunmu, Treasurer at FBN
Merchant Bank. “Giving the highly specialized nature of investing,
working with a regulated fund manager will be most beneficial to the
investor in the long run and would protect against fraud and sharp
practices from the teeming number of platforms offering untested
During his closing remark, the Founder of the Zedcrest Group and the
Chief Host of the event, Saheed Adedayo Amzat, CFA, called on the
Nigerian capital market stakeholders to unite to further capital
formation in the country. He sounded a note of warning to Nigerians on
suspicious wealth generation platforms.
“Many unsuspecting investors over the last three decades have lost their
funds to unregulated institutions that promised unbelievable returns.
All stakeholders in the sector need to speak up and inform the
unsuspecting public about investment platforms. Our regulators need to
do more with the support of all players in the Investment management
space”, he opined.
The much-anticipated event lived up to its billings as over 1,150
participants engaged the speakers on investment challenges and
opportunities they can tap into post-COVID.
Zimvest, the newly launched Investment Management subsidiary of
Zedcrest, plans to be at the nexus of a continuing conversation series
around Investment management and economic policy landscapes. The second
edition of the series is to be announced soon.
A poll conducted during the event also shows that over 60% of
participants prioritized “Capital Preservation” when choosing an
investment option. Over 72% were concerned about inflation and exchange
rate fluctuations and over 81% were concerned about Proven Track Record,
Regulatory Compliance and Transparency when choosing an investment
management partner. The session ended at exactly 1pm on the day.
A replay of this session can be watched via:
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