Consistent with its commitment to contribute to the growth and development of capital market in Nigeria and Africa, Nigerian Exchange Limited (NGX) says it will continue to collaborate with market stakeholders to enhance securities lending transactions and provide an efficient and liquid market for investors. Speaking during the NGX Securities Lending Forum 2022 in collaboration with Stanbic IBTC, which held in Lagos via Zoom, the Divisional Head, Capital Markets at the NGX, Jude Chiemeka, stated that securities lending transactions had become an important element of capital markets all over the globe.
He added that in today’s capital markets, securities seldom remained unutilised, noting that if not being bought and sold in outright market transactions, securities are frequently lent to parties wanting to borrow them, or used as collateral to raise short-term finance. Quoting a 2021 report done by International Securities Lending Association (ISLA), Chiemeka said the total value of securities made available globally by institutional investors within lending programmes stood at $34trillion with about $2.9 trillion on-loan globally across all asset classes; 48 per cent Government Bonds, 39 per cent Equities, 6 per cent, Corporate Debt Securities, 4 per cent, ETFs 3 per cent, Other Fixed Income in December 2021. He also noted that the global securities lending industry generated $9.28 billion in revenue for lenders in 2021, according to DataLend – a 21.2 per cent increase from 2020, adding that this shows the huge potential available in securities lending transactions.
“Domestically, Nigerian Exchange Limited (NGX), in response to the need for market expansion and development, introduced many products – securities lending being one of them – to give investors (retail and institutional) a wide array of asset classes to choose from. Since the Securities Lending and Borrowing (SLB) services was officially launched in the Nigerian market in December 2015, uptake has steadily risen, though not as robust as envisaged.”