FBN Holdings Plc has called on retail investors to invest in companies with strong fundamentals, sustainable growth and profitability to ensure enhanced returns on investment.
Head, Investor Relations at FBN Holdings, Mr. Tolulope Oluwole, gave the advice at the Capital Market Correspondents Association of Nigeria (CAMCAN) virtual forum on Wednesday in Lagos.
According to him, the COVID-19 pandemic and downturn in the stock market provide an opportunity for investors, therefore, urging them to go beyond speculation and invest in stocks with strong fundamentals, sound management and potentials for growth.
He said understanding to invest in good companies such as FBN Holdings, for instance, was key at this time for investors not to have their fingers burnt again.
“At this time of economic challenge, we have seen an increase in the domestic retail and institutional investors participation in the market. There was an opportunity in any market downturn and investors should key into the present opportunities in the equities market, “ he stated.
On the exit of foreign investors, Oluwole said they would soon find their way back to the market in a matter of time with strong business fundamentals.
In his presentation titled, ‘Financial media and engagement with retail investors’, he said there were a number of different investors with varied levels of interest in a company’s investment story.
Oluwole noted that while the majority of the audience has broadly similar requirements, there are subtle differences and it is critically important to ensure consistency in the messages to avoid misinterpretation.
He described retail investors as non-professional market participants who generally invest smaller amounts than larger institutional investors.
He also noted that individual investors were thought to be less knowledgeable, less disciplined, less skillful, and prone to behavioral and emotional decisions, noting that despite their lack of knowledge, the retail investment space was enormous with individuals.
According to him, knowing and understanding potential investors is very crucial when presenting the equity story and consider having a fair balance of investor type, adding that investor relations (IR) plays a pivotal role in providing detail about the health of an organisation to a wide range of interested parties.
“The increase in stakeholder interest from optimal IR will ultimately result in an increase in the market value of the organisation, as long as the company delivers on its operational performance, noting the environment. Company’s day-to-day interface include institutional and retail shareholders, bondholders, credit and equity analysts, the exchange, and the financial media. The principal role is to manage interest from these audiences and ensure they are fully informed about the performance of the business as well as identifying potential issues to address proactively,” he said.