Stakeholders in the capital market have said that the equities market can provide better returns for young Nigerians compared to cryptocurrency and foreign exchange trading.
This was disclosed at the NGX Regulation Retail Investor Workshop themed ‘Deepening financial inclusion in the retail investor ecosystem’
Speakers at the event pointed out that improved knowledge of the market could discourage the youths from going into cryptocurrency and forex trading.
Speaking at the webinar, Managing Director of APT Securities, Garba Kurfi, said, “Nestle in the year 2000 was trading at N10.00. Today, Nestle is over N1,000 and they are very generous in paying interim dividends and final dividends. So, if you take a stock priced at N10 in 2000 and 23 years later, it is N1,000, you can see how well you have hedged against inflation and whatnot. We can apply this to many other stocks, you can see what happened to Chams, Japaulgold and CWG, these were penny stocks, but they are growing in value.
“This shows that there is no better way to hedge your investment than to invest in equities. However, this knowledge is not so widely known by the younger generation. If they know this, they will not go into cryptocurrency even forex.”
According to Kurfi, youths lose more money than they make from cryptocurrency and forex trading.
“Also, there is no more monopoly in the market. Apart from equities, we have bonds and under bonds, we have different types of funds. Also, these stocks are liquid. At any time, you can come to the market and trade them,” he added. The Managing Director of Meristem Stockbrokers Limited, Saheed Bashir, in his presentation titled ‘The impact of unclaimed dividend on your investment portfolio’, said, “Data from the Securities and Exchange Commission reveals that unclaimed dividends in the Nigerian capital market increased by 20 per cent from N158bn in 20219 to N190bn in 2023. This is quite staggering. The apex regulator in the market has put in place measures on investors’ education, even committed resources to put an end to the menace of unclaimed dividend.”
On the importance of claiming dividends, Bashir said that “it helps the investor’s cash flow management. Also, when companies pay dividends regularly, it helps your portfolio to grow. You are leaving a lot of money on the table by not claiming your dividend”
In his welcome address, the Executive Director of Capital Markets, Nigerian Exchange Limited, Jude Chiemeka, said that the drive for financial inclusion was important to the growth of the Nigerian economy.
He said, “This is the third in the series of webinars this year hosted by the Nigerian Exchange group of companies and targeted at the retail mass market as we believe that there is huge untapped potential among this segment of investors. Today’s webinar focuses on financial inclusion.”