The coronavirus pandemic, while devastating for humans, has been a boon for digital transformation and automation around the world. Across different sectors, businesses are leveraging digitization to improve service delivery and brands to maintain connections with their stakeholders.
Among other things, the crisis has greatly highlighted the importance of having a digital strategy as a company. Those that lacked it prior to the crisis are left suffering from disruptions while organizations with digital agendas are able to effectively conduct business during the disaster. Part of the latter group is the Nigerian Stock Exchange, which has kept operations very much alive thanks to a steady and consistent capacity building in technology, automation, and digitization.
Since Nigeria reported its first case of the novel coronavirus late February, after which the government imposed a month-long lockdown to stem its spread in March, NSE employees and Dealing Member Firms have engaged in remote working under the Business Continuity Plan activated Monday, March 23, 2020.
Amid disruptions from the ongoing pandemic, the Lagos-based bourse has been able to maintain seamless trading activity during normal trading hours with little or no disruption, as well as enhance investors’ experience through a number of “X” technological innovations, old and new.
“X” innovations by the Nigerian bourse
The NSE in 2013 set up X-GEN, a robust technology platform that has helped deliver several benefits while demonstrating innovative trading capabilities. Launched in the same year was the Issuers’ Portal X-Issuer, a secure web-based portal designed to enable Issuers file information in an electronic format to the exchange, improving their compliance and regulation experience. Along with a host of benefits, the portal enables Issuers to submit copies of information to the exchange digitally, thereby avoiding the need for contact which is crucial to stemming the virus from further spreading.
The broker oversight and supervision system X-BOSS, launched in 2015, provides a secure central repository for information about Dealing Members in order to promote compliance as well as reduce the financial and operational burden of complying with regulatory requirements. It keeps members of the exchange abreast of their regulatory obligations at all times.
X-Smart, a market surveillance tool that leverages artificial intelligence, creates a safe and secure trading experience and helps to strengthen the integrity of the market. It allows the NSE to monitor market manipulation, gather intelligence, carry out traders’ monitoring and analysis, and execute risk-based supervision of flagged participants.
The NSE also has a program – X-Whistle – that empowers a whistleblower to report possible violations of the rules and regulations of the bourse, the securities law, and fraud related to activity within the capital market. The platform has played a significant role in minimizing market infractions.
Other customer-centric innovations include X-Bot – the AI-powered chatbot that allows investors to make inquiries through Facebook Messenger and X-Mobile – a user-friendly application designed to enhance investors’ participation in the capital market, featuring market snapshots, stock prices, market analytics, financial news, dealing members directory, and trade simulation.
Years of investment and significant progress in building a digital ecosystem has proven to be key in avoiding major disruptions amid these unprecedented times, which would have caused huge losses for local and global stakeholders.
NSE performance amid the pandemic
Buoyed by the robust digital backbone that has enabled seamless operations with continuous trading, frequent stakeholder engagement, and other functions fully activated, the exchange has seen positive performance across asset classes amid the COVID-19 crisis.
The market has remained attractive in terms of dividend yield and valuation ratios, with the All-Share Index outperforming peer exchanges in Africa, NSE chief executive Oscar Onyema said at a virtual stakeholder engagement series last week.
“Supported by recovering oil prices, resumption of economic activities and attractive valuations, we have seen the NSE ASI rally from 20.6 percent in March to -6.1 percent return Year-to-Date,” Onyema said, describing the numbers as “particularly noteworthy” when compared to other leading African exchanges.
The CEO, speaking on other asset classes, added that market capitalization in the fixed income space has risen by 8.91 percent from ₦12.92 trillion ($35.44 billion) as at the end of 2019 to ₦14.02 trillion ($36.32 billion). This, according to Onyema, is a result of increased listing activity from the Nigerian government and corporates.
“As the regulator of the market, we recognize that COVID-19 has ushered us into a new normal that is here to stay… We are proud to report that our market continues to function seamlessly and perform positively during this pandemic,” said Mary Uduk, acting head of the Securities and Exchange Commission.