NGX tasks investors on portfolio diversification for enhanced returns

NGX pushes ahead with retail participation drive - Punch Newspapers

The Nigerian Exchange Ltd (NGX) has stressed the need for diversification of portfolios by investors to ensure enhanced return on investment.

The Divisional Head, Trading Business, NGX, Mr Jude Chiemeka, said this at the Retail Investors workshop organised by the NGX and ARM Securities Ltd on Tuesday in Lagos.

Chiemeka said the NGX, as a multi-asset Exchange, had various products for every investor regardless of what their investment goals, risk appetite or return expectations might be.

He listed the products as equities, fixed income, Exchange Traded Funds and derivatives.

“The advent of the COVID-19 pandemic, amongst several important lessons, emphasised the need for individuals to have alternative sources of income other than salaries or profits from businesses.

“In the post-pandemic era, people are faced daily with the problem of finding credible investment platforms to grow their wealth.

“This problem is even further complicated by the proliferation of Ponzi schemes promising high and unrealistic returns, hence the need for investors’ education.

“At the NGX, we will continue to prioritise investor education to ensure that investors understand capital market investments and mechanisms, as only then will they be empowered to make sound investment decisions,” Chiemeka said.

The News Agency of Nigeria (NAN) reports that the webinar was entitled: Creating an Investment Portfolio that Works in a Post-COVID Era.

Mr. Joshua Olutola, Senior Equity Trader, ARM Securities Ltd, with the theme Building Your Own Portfolio.

Also speaking, the Senior Equity Trader, ARM Securities Ltd., Mr Joshua Olutola, said the economy was still fragile in spite of the efforts by the government.

Olutola said there was still huge potential for the market to grow the economy despite volatility.

He urged investors to identify their needs and the viability of the asset class before creating an investment portfolio.

“Investment needs across investors differ and may include one or more of the following; capital appreciation; diversification; hedge against inflation/devaluation among others.

“Creating an investment portfolio, an investor should consider fundamental analysis, securities selection, watch out for corporate deals, fixed income investments and invest in collective investment scheme,” he said.

Olutola also urged investors to be watchful as some sectors might be visible but not all companies under the sector viable to bring the desired returns on investment.

The Head, Secondary Markets of the NGX, Mr Franklin Nwaubani, advised investors to pursue their financial goals by leveraging the capital market.

Nwaubani said that a realistic financial framework would help an investor to take advantage of financial opportunities inherent in the market.

He noted that investing in equities afford an investor; capital growth, buying and selling, shareholder rights and dividends.

“Invest in the capital market for predictable income stream and capital preservation; regulatory oversight; custodianship (tax advantage); diversification and trust structure,” he added.

The News Agency of Nigeria (NAN) reports that the theme of the webinar was “Creating an Investment Portfolio That Works in a Post-COVID Era.”
(NAN)

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