How Technology Can Help African Stock Markets Attract Young Investors

While speaking at the recent Nigerian Exchange (NGX) Ltd. Capital Market Conference, NGX CEO Temi Popoola shed light on the problem and the opportunities.

He cited the banking sector, where technological innovations have enabled customers of banks in Nigeria and other parts of Africa to transact within minutes, using their phones and from the comfort of their homes. Meanwhile, on the other hand, it would usually take days for a new trader to set up a brokerage account.

He also explained how billions of dollars flow through Nigerian banking customers through customers who transact digitally. In 2020, approximately $400 billion was sent digitally from one bank account to another. Interestingly, only a fraction (less than 1%) of this total sum was captured by the Nigerian capital market. Popoola said it would have been easier for the Nigerian stock market to capture more of those billions using technology.

He went on to explain how today’s generation of young tech-savvy people want everything done instantly. And considering that one of the biggest challenges facing African exchanges is the longer time it takes to access services, Popoola said the focus has been on how to effectively deploy technology to automate certain essential capital market services. Already, this has proven effective in Nigeria, in the case of MTN Nigeria’s December 2021 mainline offering which was broadcast digitally.

“So you have a current base of around 50+ as top traders on our platform today compared to the belly of the Nigerian demographic at 20-25. For us as a business , as you think about that future, then you have to ask yourself what needs to happen to capture that investor base and very easily what you find is that there’s a technology element missing to capture that young generation that’s usually always on mobile phones and things of that nature… So the opportunity is there. How then, as an exchange, can we seize it? And what we’re doing at the heart of it is something we did successfully in December 2021. We had a landmark offer with MTN. And for the first time, we were able to deploy technology that can allow you, within minutes, to participate in this offer. was a first experience for us. has proven that this opportunity exists. In this offer, we saw a large share of female investors. We also saw a large share of y young investors who participated in the transaction,” said the CEO.

He went on to say that the Nigerian Stock Exchange has since continued to come up with more solutions to this basic technological challenge in the capital market. A capital market fully supported by technology is expected to help attract more investors, especially younger ones.

It could work for other exchanges across Africa.

About Barbara J. Ross

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