Online Trading Ranking Report 2020: The Market - A Hawk's View

Friday, September 04, 2020 / 05:20 AM / By Proshare Research / Header Image Credit: EcoGraphics

The market refers to thevarious trading spaces where equity, debt, exchange-traded funds and foreignexchange assets are bought and sold to clear available supply at discoveredprices; the asset classes sell in organized digital settings.

The broad categories oftradable assets in the financial market include:

Fixed Income Securities and Bonds
Listed Equities
Mutual Funds, ETFs and REITs
Foreign Exchange
Commodities; and
Foreign Exchange

The debtmarket has become the single most important market in the domestic financialsystem, but equities remain relevant even if for the purpose of diversifyinginvestor portfolios and providing an inbuilt pro-cyclicalgrowth opportunity. The unlisted securities market has remained relativelysmall but has the potential for growth if retail action by way of digitaltrading and remote market price discovery intelligence strengthen. The unlistedsecurities market (NASD) as of 2019 had a market turnover of less than 0.8% oftotal market value. Digital trading activity could scale up traded volumes in2020 and improve marketliquidity.

Market tradingactivities in 2020 may have been affected by two contending factors moving inopposite directions. The slow growth in the economy with real GDP rising by +1.87% in Q1 2020 down from year end (FYE) 2019growth of +2.55%, combinedwith tumbling interest rates and supply chain disruptions in the United Statesand Europe the outlook for equities in the domestic Nigerian market is mixed.Nigeria's equities market has had a difficult half year in 2020 though the debtmarket has tayed buoyant as the federal government continues to finance aballooning debt position (N28trn by June 2020) through the commercial fixedincome market to cover short-term fiscal obligations. The slow market dynamicsfor equities have led more CMOs to seek ways of muscling down operating costsand client management expenses by adopting technology and digital tradingplatforms.