Stockbrokers hail Nigeria’s return to S&P Frontier Watchlist

Stockbrokers hail Nigeria’s return to S&P Frontier Watchlist

The Chartered Institute of Stockbrokers and the Association of Securities Dealing Houses of

Nigeria have welcomed the decision of S&P Dow Jones Indices to place Nigeria on its 2027

Watchlist for potential reclassification from a Standalone Market to a Frontier Market.

This was contained in a joint position paper released on Tuesday, jointly signed by the President of the CIS, Fiona Ahimie, and the Chairman of ASHON, Sehinde Adenagbe.

In the statement, the two premier market bodies described the development as a “significant endorsement of the far-reaching reforms undertaken within the Nigerian capital market” and noted that it “underscores the growing confidence of the international investment community in the country’s evolving market architecture.”

According to the market operators, S&P DJI’s decision reflects “increasing recognition of the sustained efforts of market regulators, infrastructure providers, dealing members, and other key stakeholders to strengthen market integrity, enhance operational efficiency, deepen liquidity, and align Nigeria’s capital market with internationally accepted standards and global best practices.”

They added that the step “affirms the effectiveness of ongoing initiatives aimed at improving market accessibility, transparency, investor protection, and overall competitiveness, thereby positioning Nigeria as an increasingly attractive destination for both domestic and foreign portfolio investment.”

In its latest Country Classification Review, S&P DJI noted that the “Nigerian regulatory environment has modernised to improve transparency, enforcement, and market integrity.”

However,  the  index  provider  added  that  “consistency in  policy application  and  operational resilience are required for reclassification,” prompting the decision to monitor developments closely through 2026.

Reacting to this, the CIS and ASHON observed that the assessment “demonstrates that Nigeria’s reforms  are  being  positively acknowledged  while  also  identifying  areas  requiring  sustained implementation before a final reclassification decision is made.”

The bodies also addressed the contrasting perspective from FTSE Russell, which recently deferred

Nigeria’s reclassification over concerns that foreign investors are required to prefund transactions.

The CIS and ASHON clarified that the successful implementation of the T+1 Settlement Cycle

has not altered the market’s fundamental Delivery versus Payment framework.

They said, “Under the DvP principle, the transfer of securities and the corresponding payment

occur simultaneously at settlement, thereby mitigating principal risk and eliminating the need for

investors to make advance payments before settlement. Consequently, foreign portfolio investors

are not required to prefund their transactions.”

To better accommodate global players, they noted that the “settlement cut-off time has been revised from 8:00am to 5:00pm. to better accommodate cross-border investors and facilitate their more effective participation in the Nigerian capital market.”

While celebrating the milestone, the association heads urged local stakeholders to keep pushing forward, cautioning that “the placement of Nigeria on the Watchlist should not be viewed as the destination but as an important milestone on the journey towards securing full Frontier Market status.”

They concluded, “The CIS and ASHON remain optimistic that, with sustained reforms, policy consistency, operational excellence, and continued collaboration among all stakeholders, Nigeria will successfully attain Frontier Market classification in due course and aim for the next classification.”

Source: https://punchng.com/stockbrokers-hail-nigerias-return-to-sp-frontier-watchlist/