SecondSTAX partners NGX to drive cross-border investment flows into Nigerian capital markets

By Onome Amuge.

SecondSTAX,a technology company that is building solutions to enhance intra-Africa capital and investment flows,has initiated a new partnership with the Nigerian Exchange Limited (NGX) to enable institutional investors from across Africa to directly invest in Nigeria’s capital markets. The partnership was created in collaboration with Afrinvest (West Africa) Limited, a leading capital market holding company active in six principal areas: investment banking, securities trading, asset management, trusteeship, consulting, and financial technology.

This partnership is expected to open up new opportunities for investment and capital flows across Africa, particularly in Nigeria’s growing financial markets.

The partnership between SecondSTAX, the Nigerian Exchange Limited, and Afrinvest will make it easier for licensed broker-dealers, asset managers, large commercial banks, and other institutional investors across Africa to invest in Nigeria’s capital markets via SecondSTAX’s cloud-based portal. The portal will offer a transparent, user-friendly interface that allows investors to transact in their native currencies, making a wide range of assets and opportunities available to a larger number of Africans and facilitating increased wealth creation on the continent.

Nigeria’s position as Africa’s largest economy makes its capital markets some of the most lucrative investment opportunities globally. For example, the Lagos bourse performed exceptionally well in 2020, with a 50 per cent gain that was the highest since December 2007. The equity index was also ranked as the best in the world among 93 stock indexes tracked by Bloomberg, and some companies listed on the exchange saw returns of up to 400 per cent. However, the fragmentation of capital markets across Africa has meant that only Nigerian residents were able to access these opportunities.

To address the challenge of capital market fragmentation, SecondSTAX is developing technology solutions that will enable the seamless flow of capital and institutional investment throughout Africa. The platform is designed to consolidate all debt and equity capital markets, simplifying access to relevant investment opportunities across the continent. It is also built to comply with local regulations, securely and efficiently routing orders onto existing infrastructure. This empowers African investment firms to better serve their clients and grow their businesses.

SecondSTAX has already established partnerships with the Nairobi Securities Exchange and the Ghana Stock Exchange, making it easier for investors from across Africa to access investment opportunities in those markets.

The new partnership with the Nigerian Exchange Group will expand access to Nigeria’s capital markets, while also simplifying access for Nigerian investors into other markets. Access to the service will initially be limited to Qualified Institutional Investors with a minimum trade order of USD 10,000.00 (or the equivalent value in NGN). Over time, this limit will be reduced to allow more individuals to use the service.

Eugene Tawiah, CEO and co-founder of SecondSTAX, said that the partnership with the Nigerian Exchange Group represents an important milestone in the company’s journey to integrate all capital markets across Africa. He said that Nigeria’s capital markets offer significant investment opportunities, which have until now been difficult for institutional investors outside the country to access. At the same time, Nigerian investors have struggled to invest in other markets on the continent.

“This partnership addresses both problems and we are excited to see how investors take advantage of the opportunities that abound across the continent,” Tawiah said.

Temi Popoola, CEO of the Nigerian Exchange Limited, commended SecondSTAX for its innovative solution to drive institutional investment across Africa. He noted that this aligns with the Nigerian Exchange Limited’s own initiatives, such as the African Exchanges Linkage Project and the Pan African Payments Settlement System, which aim to integrate and facilitate transactions within Africa’s capital markets. These efforts, he explained, are designed to foster innovation and growth in the Nigerian capital markets and across the continent.

“At NGX, we remain committed to fostering inclusive growth and are open to collaborating with more capital market innovators to stimulate participation and investment in the Nigerian and African capital market. We look forward to the opportunities this partnership with SecondSTAX will unlock and the positive impact it will have on the continent,” Popoola added.

Ike Chioke, group managing director of Afrinvest, noted that as a leading capital markets holding company, Afrinvest is dedicated to driving innovation to grow Nigeria’s capital markets. He added that Afrinvest is excited to collaborate with SecondSTAX to create opportunities to attract capital into Nigeria’s capital markets and expand investment options for Nigerian investors.