As part of the strategy to attract retail, institutional and foreign investors into the Nigeria’s Capital Market, stockbrokers have been urged to deepen their knowledge of data analysis to enable investors identify major risk factors in each quoted company.
Commenting on one of the major challenges to investment in securities in Nigeria, a leading investment analyst and Chief Executive Officer, Ademola Omolehinwa and Company, Mr Ade Omolehinwa lamented the dearth of data that reveal risk factors of quoted companies in Nigeria.
Omolehinwa, who made a comprehensive presentation on “ Securities Analysis and Valuation in the Capital Market “ at the Third Stream of the Executive Conversion Programme of the Chartered Institute of Stockbrokers ( CIS), yesterday in Lagos, explained that inability to identify the major risk factors which he technically called beta factors was a major impediment to investment in the quoted companies in Nigeria.
According to him, in the developed economies, a potential investor can easily buy data of a quoted company and identify its risk factors as a basis for decision to invest hugely in such a company.
“ Comprehensive data analysis to show risk factors of a company is lacking in Nigeria although few companies that are rating agencies do a little bit of such.
Can we easily get beta factors of our quoted companies in Nigeria ? In developed economies, one can buy data of a company and identify its major risk factors. What obtains in those economies is that companies’ data are analyzed alongside with the performance of the economy.
“ Once the risk factors of a company are identified, it becomes easier to analyze the stream of expected return and required return from the company. These are important data for investment decision. We expect our stockbrokers to develop capacity in this area.” said Omolehinwa.
Corroborating him, a Past President of the Institute, Mr Mike Itegboje who made presentation on “Overview of the Financial Markets and Institutions” explained that relevant information on the quoted companies would attract informed retail investors, institutional and foreign ones into the market. According to him, the Executive Conversion Programme is designed to raise the bar of human capital in the securities industry. The Institute’s Second Vice President, Mr Oluwole Adeosun who addressed the participants on the “Primary and Secondary Market and their Opreations” urged the participants to attend the Institute’s Continuing Professional Development (CPD) programme in order to keep tab on the development in the market on regular basis.
The participants who were mostly university dons commended the Institute on the initiative of the programme promised to support the capital market through research and analysis of data. The Deputy Vice Chancellor, Adeleke University, Ede , Professor Solomon Adebola said the programme would spur his colleagues to collaborate with the Institute in the area of data analysis and also encourage their students to develop interest in the financial market.