The Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema, said that informed investors and players in the Nigerian capital market were not surprised that the country exited recession in the second quarter of this year because market data gave the signals.
While the national economy relapsed into recession in Q2, 2016 with a contraction of 2.06 per cent, the NSE All-Share Index dropped to its lowest in four years at 22,256.32 basis points.
At the early start of the Q1, 2017, Onyema said the market started to show signs of a rebound that was sustained through Q2, 2017.
“Correlated with other macro-economic indicators and market statistics, it was quite obvious that the national economy was tethering its way out of recession,” the NSE CEO told stakeholders in Lagos, adding, “Accordingly, when the news broke that the Nigerian economy was out of recession in the Q2 this year, it came as no surprise to discerning investors who had been abreast of market data.
“It comes to mind as a reminder that the capital market remains a very reliable forward indicator of economic direction. The capacity by which the capital market is able to exhibit this characteristic is facilitated through market data.”
The NSE boss explained that there were many ways in which market data could prove its value, and one interesting way was in understanding economic trends.
“Historians are of the opinion that history always repeats itself; similarly, a familiar saying about history tells us that ‘history is written by the victors’,” he added.
Onyema said, “If this saying is true, then it corroborates the idea that ‘the market always wins’. Market events of yesterday are written in market data, just as a book is written for its readers. So, if it is true that readers are leaders, then it is safe to conjecture that the investors who ‘read’ market data would eventually lead the market – that is, emerge profitable.”
According to him, market data, the by-product of activities on the platform of the Exchange, remains a key ingredient for investment endeavours.
Onyema said the NSE was committed to intimating stakeholders with the new data products that would complement its existing list of non-display products, which cut across real time, reference and thematic datasets.
These, he noted, were designed to help unleash investors’ creative juices and enable them to take advantage of emerging technologies such as cloud, analytics, algorithmic trading and artificial intelligence to name a few.
Since the launch of X-GEN in 2013, one of the mandates of the Exchange has been to make the market more accessible, using technology as an enabler. This was achieved with the introduction of FIX protocol as the conduit to open up instant access of the Nigerian bourse to investors, media, government, software vendors, and other capital market stakeholders.
X-GEN, it was gathered, had further accelerated financial inclusion as well as enhance investor’s participation in the capital market through initiatives like “Trade Smart”, for investors to trade on-the-go and at their convenience.
“Today, broker-dealers can now route orders from the convenience of their offices instead of coming to the floors of the Exchange. All these and much more have been facilitated through technology with market data as the catalyst, the NSE boss said.
On the state of the market, he said, “Our efforts in improving investor’s education and enhancing the investor’s experience are yielding positive results. The NSE ASI index is arguably the best performing index year-to-date in Africa in comparison with major indices in the same league.
“Considering the fact that our market closed the previous year on a negative note, the NSE ASI is up by 32.05 per cent YTD. Notably also, is the fact that we have witnessed an unprecedented local participation in our market within the last one year.
“Among other indicators, it is a testament that local investors are embracing market data better than they used to – to spot the inherent opportunities or challenges, and make informed decisions on their investments.”