The Securities and Exchange Commission has expressed concerns on the average age of investors in the capital market and the consequences for the market, Oluwakemi Abimbola reports.
Shareholders and other young Nigerians have expressed diverse views on investment in the stock market.
This came as the Securities and Exchange Commission expressed concerns about the average age of investors in the capital market and the consequences for the market.
Second-generation banker and financial educator, Godfrey Kelechukwu, had a head-start on financial literacy courtesy of watching his banker father and his colleagues read and analyse the stock pages of newspapers and financial reports of companies at the weekends.
Having such early exposure to financial matters led him to decide to become a banker. His interest in teaching people about money and the COVID-19 pandemic made him turn to the Internet to provide financial information which has progressed to him organising events that have reached thousands of people.
Kelechukwu notes the fact that some young Nigerians do not think long-term.
He says, “A majority of young Nigerians think short term, rather than long term and the capital market is where you have to play long term. If you check the age range of those who do Ponzi schemes, they are mostly under 40.
“They do not want to play the long-term game. They want where they can put their money and get it back in 30, 60, or even 10 days with huge interest. This is a major problem. We have this short-term mentality.”
The same cannot be said about 35-year-old marketer, Morenikeji Bello, whose first exposure to the capital market was her first job at a financial services firm. She says that most of what she has heard while growing up is about the importance of saving; a habit that she has already cultivated but she has no idea what to do with the money that she has saved.
She says, “It was a shock that saving my money was not enough. At first, I didn’t understand all the investment a bit but I soon got a hang of it because I worked in the space.
“I am not surprised many young people don’t know about investments or when they think about it, they think in terms of these get-rich-quick schemes.”
During a February 2023 meeting with a team led by the British Deputy High Commissioner, Ben Llewellyn-Jones, in Abuja, the Director-General of the Security Exchange, Lamido Yuguda, expressed concerns that the average age of those with accounts in the capital market was over 50.
He said, “When we assumed office, we were shocked to know that the average age of the Central Securities Clearing System account holder was over 50 years. The CSCS is a depository, so if you are investing in equities, you must have a CSCS account.
“When young people are not participating in any market, that market is doomed to fail. Young people today prefer to do things on their phones, if you have to fill a stack of forms manually, young people will not do it. We want to make investing in the capital market a fun experience.
“The capital market experience starts with a bank account, we have decided to look at the whole process and find out what is turning young people off and we have started the process.”
One way Yuguda says that the SEC will be deepening participation in the market is through fintech companies, which is an area that young Nigerians have bought into, with many having stock-trading apps on their phones, which allows them to invest in stocks even beyond the shores of Nigeria.
So far, the SEC has created a fintech and innovation office which guides fintech companies seeking entry into the market through formal registration with the SEC.
According to the regulator, there are a number of fintech companies currently undergoing the registration process.
Lack of planning
Speaking with our correspondent, a long-time investor, Chairman Emeritus of the Independent Shareholders Association of Nigeria, Sunny Nwosu, says that young Nigerians are not patient and don’t think long-term. He observes that they find it difficult to play in the capital market.
Nwosu says, “Age has nothing to do with investment. I’m 70 and I have been in the market for 50 years now. My role and duty are to nurture young people to understand the market and come into the market.
“At age 70, I cannot do another 70. It is better for the young people to come in now that we are still active to teach them how investment in the capital market plays out.
“However, the young people are on the fast lane. None of them wants to endure as we did. I started buying shares when they were paying one Kobo dividend, half a Kobo dividend, the records are there. But who among the young ones can wait for one Kobo dividend in any stock today?
“They want to go to an area where they can make 100 per cent again in their investment and it doesn’t play that way in the capital market. The capital market is structured in such a way that if you cannot wait for a dividend, you take the capital appreciation and get out. The problem is on the young ones who don’t have the patience to wait.”
