Udenwa Pushes Product Diversification, Investor Education To Curb Capital Market Volatility

…Scholars Commend CMAN For Advancing Knowledge In Capital Markets

A former Head of the Department of Banking and Finance, Nasarawa State University, Keffi, and Fellow of the Capital Market Academics of Nigeria, Prof. Theresa Udenwa, has called for deeper product diversification and sustained investor education as key measures for curbing volatility and strengthening resilience in Nigeria’s capital market.

Udenwa made the call while delivering her Fellowship Inaugural Lecture titled “Building Resilience and Navigating Volatility in the Nigerian Capital Market” to members of the Capital Market Academics of Nigeria on Saturday.

She said that while volatility is an inherent feature of financial markets globally, the extent to which markets are able to absorb shocks and recover over time reflects the strength of their institutions, depth of products, and quality of participation.

According to her, Nigeria’s capital market has recorded notable improvements in recent years, including stronger trading platforms for equities, fixed income, and commodities, as well as enhanced regulatory oversight following recent reforms.

However, she noted that the market remains vulnerable to recurring shocks driven by macroeconomic instability, policy uncertainty, and limited depth in products and participation.

“Volatility is not abnormal in capital markets,” she said. “What matters is how markets respond to shocks and whether they have the institutional strength and depth to recover without long-lasting damage.”

She argued that a market dominated by a narrow range of instruments is more susceptible to sharp price swings, particularly during periods of uncertainty.

To address this, she stressed the need to expand the range of financial instruments available to investors.

“A deeper menu of instruments—including derivatives, exchange-traded funds, sustainability bonds, sukuk, and other structured products—provides investors with tools for hedging, portfolio diversification, and risk transfer,” she said.

Such instruments, she explained, allow investors to manage volatility without exiting the market entirely, thereby reducing abrupt capital outflows and excessive price movements.

Udenwa who was a former first lady in Imo State also underscored the importance of investor education and broader participation as essential pillars of market resilience. She observed that markets dominated by a small group of participants are more prone to herd behaviour, which often amplifies volatility during periods of stress.

She commended the Securities and Exchange Commission (SEC) for its efforts to promote capital market education in Nigerian universities, noting that improved financial literacy would help investors better understand risk, adopt longer-term investment horizons, and avoid panic-driven decisions.

“When market participants have confidence in the rules of the game, sudden shifts in sentiment are less likely to trigger disorderly exits,” she said.

She added that stress-testing frameworks, forward-looking supervision, and regulatory technology would enable regulators to “anticipate vulnerabilities and intervene early rather than react after shocks occur.”

She further highlighted the role of robust market infrastructure and technology, noting that “efficient trading, clearing, and settlement systems are essential for maintaining orderly markets during periods of stress.”

Beyond product diversification and education, Udenwa highlighted the need to strengthen regulatory and institutional frameworks. She said clear, predictable, and consistently enforced regulations help reduce uncertainty and anchor investor confidence, especially during volatile periods.

She further emphasised the importance of robust market infrastructure and technology, including efficient trading platforms, resilient clearing and settlement systems, and strong cybersecurity frameworks, to ensure orderly market operations during episodes of heightened volatility.

Udenwa concluded that resilience in Nigeria’s capital market is neither accidental nor static, but deliberately built through coherent policies, diversified products, informed participants, and strong institutions capable of adapting to uncertainty and supporting long-term economic growth.

Earlier in his speech, the President of CMAN, Prof Uche Uwaleke reiterated the importance of the Nigerian capital market to the development of the economy.

He said the Inaugural Fellowship Lecture is being organised as part of CMAN’s contribution to the development of the Capital Market in Nigeria.

He assured stakeholders that CMAN would continue to organise engagements that would assist in deepening knowledge about the capital market as well as proffer solutions to some of the challenges facing the economy.

In his message of goodwill, the Vice-Chancellor of Bingham University, Professor Haruna Kuje Ayuba, commended the Capital Market Academics of Nigeria (CMAN) for sustaining its tradition of intellectual engagement, describing its Fellowship Inaugural Lecture series as a vital platform for advancing knowledge in Nigeria’s financial sector.

Ayuba expressed appreciation to the leadership of CMAN, including its President, Professor Uche Uwaleke, Vice President, Professor Seth Akutson, and other members of the association, for their commitment to promoting research and academic excellence in the capital market space.

The Vice-Chancellor congratulated Professor Udenwa for accepting to deliver the milestone lecture, describing her as a respected scholar and recalling his earlier experience representing his university leadership at her professorial inaugural lecture.

Ayuba described the topic of the lecture as timely and highly relevant, given the dynamic nature of Nigeria’s financial environment.

He noted that as the country seeks economic stability and sustainable growth, robust capital market strategies remain critical.

He expressed optimism that the lecture would deepen understanding of market dynamics and provide practical insights for navigating uncertainty and strengthening economic resilience.

Ayuba also commended CMAN for its role in fostering collaboration, knowledge sharing, and innovative thinking within the financial sector.

He urged stakeholders to continue working together to develop solutions that would strengthen Nigeria’s capital market and contribute to national prosperity.

Also speaking, Dr. Maurice Nnamdi Mbiaeri, who is the immediate Past Federal Permanent Secretary, Office of the Secretary to the Government of the Federation, praised the Capital Market Academics of Nigeria (CMAN) for its commitment to academic excellence and research-driven engagement in Nigeria’s capital market.

Mbiaeri described CMAN as a vital platform that fosters collaboration among academics, policymakers, and market practitioners, strengthening the foundation of Nigeria’s financial system.

He highlighted the strategic role of the capital market in mobilising long-term finance, supporting infrastructure, and driving inclusive economic growth, noting that scholars’ rigorous analysis and evidence-based recommendations are essential for informed policy and market regulation.

He commended the inaugural lecturer, Professor Theresa Udenwa, as a distinguished scholar and thought leader, confident that her lecture would be insightful and impactful.

Mbiaeri also lauded CMAN’s efforts in mentoring young academics, promoting transparency, and enhancing governance, urging participants to engage actively in discussions for sustainable market development.

A former Vice Chancellor of Nasarawa State University Keffi and a Fellow of Capital Market Academics of Nigeria, Professor Muhammad Mainoma, described Udenwa’s inaugural lecture as a timely contribution to strengthening Nigeria’s capital market, framing her name as a symbol of resilience and reform.

In a goodwill message at the lecture, he noted that Udenwa’s work has consistently helped stakeholders navigate uncertainty, promote wealth creation and protection, and advance adaptive leadership within the financial system.

According to him, her scholarship bridges theory and practice, supporting sound regulation, ethical governance, and inclusive growth.

He congratulated Professor Udenwa on the academic milestone, describing her career as a roadmap for resilience and long-term capital market development in Nigeria.