Stanbic IBTC’s security lending to boost investors’ diversification options

The Chief Executive Officer, Stanbic IBTC Bank, Yinka Sanni has stated that the new securities lending product launched by the bank would help investors to diversify their portfolio into different financial derivatives.

According to him, investors needed to spread their investment options into different financial derivatives in order to minimize risks associated with tying investments in particular stocks and securities.

Speaking at the launch of the product in Lagos on Tuesday, Sanni, who noted that diversification into different asset classes reduces risk levels, added that it also offers higher returns to investors.

“We are delighted to be introducing the Stanbic IBTC Securities Lending Product into the Nigerian market. The product launch is a further demonstration of our commitment to facilitating stability and growth of the Nigerian capital market, via confidence-building initiatives and leveraging investment opportunities in the market. Other derivatives will be introduced in the future.

“Securities lending involves the temporary transfer of securities from one party (the Lender) to another (the borrower) for a fee. These transactions are facilitated through an intermediary acting as agent or principal intermediary between the lender and borrower. The borrower is obliged to return the securities, either on demand or at the end of a term.”

He explained that Stanbic IBTC has a responsibility to help grow the capital market through products initiatives that could help investors harness investment opportunities that exist in the market.

He added that the bank would relying on its extensive product knowledge and expertise; rich technology capability and access to lenders and borrowers to drive utilisation of the product.

The Chief Executive Officer, Nigerian Stock Exchange (NSE), Oscar Onyema noted that various initiatives have been introduced to strengthen the capital market, including the derivatives market.

He pointed out that despite the prevailing challenging operating environment and the attendant indifferent performance of the capital market, characterised by low level investor confidence, there still exists enormous investment opportunities in the market.

He described the investment opportunities in the capital market as huge, while reiterating the Exchange’s goal of becoming the leading bourse and gateway to Africa in terms of capital formation and investment.

Stanbic IBTC Bank had in the recent past launched several products and services to stimulate and deepen growth of the Nigerian capital market. Among these is the Purchasing Managers’ Index (PMI), a composite index to measure private sector activities to provide an early indication of business conditions in the country.

Another product is the Stanbic IBTC Exchange Traded Fund 30 (ETF 30), an index built on the NSE 30 Index, which tracks the 30 most capitalized companies on the Nigerian Stock Exchange.