New Telegraph

September 30, 2023

Market capitalisation for ETF hits N24.51bn


Market capitalisation for Exchange Traded Fund (ETF) increased by 272.30 per cent to close at N24.51 billion in 2020, according to a document obtained from the Nigerian Exchange Limited (NGX). The Group Chief Executive Officer, NGX Group, Mr. Oscar Onyema, who stated this in a report, noted that in collaboration with Meristem Wealth Management Limited, NGX launched two new ETFs – Meristem Growth ETF, which tracks the NGX Meristem Growth Index, and Meristem Value TF, which tracks the NGX Meristem Value Index. Despite FX restrictions, foreign transactions in Exchange Traded Funds (ETFs) grew by 99.64 per cent, even as ten stock brokers drove 99.9 per cent of total transaction value and 97.3 per cent of total volumes of ETFs in the second quarter (Q2) of 2021.

The NGX quarterly report for Q2’21 as at June 30, 2021, revealed that NewGold emerged as one of the most active ETFs with its value rising by 99.58 per cent to N4.41 billion, taking the lead in both value and volume traded in the ETF space as it traded 524.241 units, valued at N4.41 billion. Vetiva Griffin 30 was next, trading 501,48 units worth N8.12 million, Vetiva Industrial Goods transacted 248,469 units worth N4.52 million, Meristem Value ETF sold 115,58 units valued at N1.87 million, while Stanbic IBTC ETF traded 19,774 units valued at N1.48 million. According to NGX, analysis of the report showed that Rencap led in terms of brokers’ performance as regards value, retaining its top position in this category, having traded about 69.7 per cent. RMB followed, accounting for 12.72 per cent, while ABSA Securities accounted for 9.04 per cent of transactions. Also, Vetiva led in terms of volume, accounting for 31.55 per cent in the period under review. Rencap followed with 24.9 per cent, while IONE accounted for 14.66 per cent volume of transactions.

However, market capitalisation declined by a record 39.7 per cent between both quarters as the commodity-backed ETP suffered net outflows of 54 per cent, from N12.0 billion in Q1 2021 to N5.5 billion in Q2’21, due to FX restrictions in the regulatory climate. Furthermore, trade volumes fell by approximately 69 per cent from about 5.3 million units in Q2’20 to 1.6 million units in Q2’21. Investors, however, remain positive on the gold-backed ETF as well as diversifying their investment portfolios with listed ETFs giving exposure to the NGX 30 index.

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