Market downturn: NSE seeks portfolio diversification to mitigate risks
Mr Oscar Onyema, the Chief Executive Officer, the Nigerian Stock Exchange (NSE), on Sunday advised investors to diversify their portfolios across different asset classes to mitigate risks.
Onyema gave the advice at a two-day workshop organised by the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos.
He said that developments in the market made it imperative for investors to dig deeper and understand the dynamics of the market to mitigate risks.
Speaking on the workshop theme: “Effective Reporting of Changes in the Nigerian Capital Market,”, he said that retail investors needed to be educated on the reasons they should take portfolio approach to investment.
“It is important to do the analysis, understand where those opportunities are, but certainly there are opportunities, not only in the equity side, but across the various asset classes,” he said.
The SEC chief executive officer said that the Nigerian capital market and the business of the stock exchange would always be impacted by dynamic economic trends and investor demands.
“Achieving success through growth that creates value will increase the bourse’s ability to operate efficiently and profitably in the transient advantage economy that has unfolded in Nigeria and around the world.”
He said that the market, in the short-term, would experience huge volatility, but should not distract investors from investing because of fundamental elements inherent in listed companies with a well regulated market structure.
Onyema said that a lot of energy had been spent building the foundational aspect of the market in terms of transparency, orderliness, fairness, disclosure and enforcement of rules and regulations.
“While there has been no respite in the macro economy and operating environment due to lingering oil price and foreign exchange pressures.
“Our long-term outlook for the exchange remains positive as listed companies continue to show resilience and our members have been repositioned to deliver superior value to investors.
“It is important to note that we are not the only exchange affected by these global developments of all the 24 exchanges in Africa, 20 are experiencing a downturn,” Onyema
He said that “opportunities still exist for investors in stocks, in spite of the current downturn in the capital market.”
“As we continue to work towards achieving and sustaining this market, the importance of financial journalists cannot be over emphasised.
“”Financial journalists have the potential to influence investors’ behaviour. Negative reporting may result in sensationalism and put additional pressures that can force investors’ decisions negatively,” he said.
Earlier, Mr Goddy Egene, the CAMCAN President, commended the regulators for attending the workshop.
He said that many changes had taken place in the market in the last few years and there was need for cooperation of stakeholders for the progress of the market. (