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Wednesday, February 1, 2023

Nigerian Investors Left Behind in Global Retail Stock Trading Boom

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Nigerian investors have not participated in a boom in retail stock trading fueled by zero-fee trading apps like Robinhood that have simplified day-trading.

Data from the Nigerian Stock Exchange (NSE) shows that the value of domestic retail trades in the first half of the year is down 13 percent to N286.41 billion, compared to N329.6 billion in the earlier period.

Meanwhile in the U.K, tax-free savings account openings at Interactive Investor jumped 238 percent for investors between 25 and 34 years of age in April and May.

In India, newly minted day traders are falling in love with stocks that trade below 7 U.S. cents apiece and riding most of them straight up.

Small-time investors in Moscow bought almost twice as many Russian shares in June than in April, according to a Bloomberg report.

In Malaysia, individual buyers are at least partially behind huge rallies in medical glove makers – with one gaining more than 1,600 percent this year.

In Japan, (long a haven for day traders) small investors boosted an obscure biotech venture with seven straight years of losses by almost 11-fold on optimism for a coronavirus treatment.

Analysts say that retail traders are also being fueled by savings accounts paying out nearly nothing and people finding extra time while working from home.

In Nigeria the trend has not caught on largely due to the bad aftertastes from the stock market crash of 2007/2008 that wiped out a generation of retail traders.

Total domestic trades on the NSE between January and June 2020 was equivalent to N606.93 billion, down from N614.73 billion in 2019 the data shows.

The NSE main index has lost 8 percent year to date.

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