The growth of the risk management industry in Nigeria results from the support it has received from key financial and capital market regulators in the country.
Mr. Joachim Adenusi, the Founding Partner and Chief Executive Officer Conrad Clark Nigeria Ltd., disclosed this while providing his perspective on the “Role of Risk Management in The Development of Nigeria’s Financial Market” that regulators like the Securities and Exchange Commission (SEC), and the Central Bank of Nigeria (CBN) have reinforced the need to value risk management in every organization.
He said governance remains at the core of risk management in the financial, capital market and all other sectors of the economy. Speaking further, he said there was a need for a re-orientation on Risk management, as it is about the control mechanism and value creation for organizations and institutions.
He called on the Risk Management industry in Nigeria to embrace innovation and creativity, leading to profitability for companies. The risk management expert also called for the development of new products in the industry that will further strengthen the scope of risk management. Source Proshare
So, in order to minimize and control the exposure of investment to such risks, fund managers and investors practice risk management. Not giving due importance to risk management while making investment decisions might wreak havoc on investment in times of financial turmoil in an economy. Different categories of assets come with different levels of risk.
Fund managers can perform simulation with InfoWARE Value at Risk (VaR) platform, which is a financial metric that estimates the risk of an investment. More specifically, VaR is a statistical technique used to measure the amount of potential loss that could happen in an investment portfolio over a specified period of time. Value at Risk gives the probability of losing more than a given amount in a given portfolio.
This ability to understand and control risk enables organizations to be more confident in their business decisions. InfoWARE Risk Mgmt (VaR) (infowarelimited.com)
Over time, automated systems has been configured to help portfolio managers Set rules for multiple portfolio been managed and set limit on what the portfolio can perform per time thereby reducing the amount of risk encountered.
But in the final analysis, the best you can do is accept that risk is always going to be there and strike the best balance between risk and reward that you can.
There is a sweet spot somewhere between sitting on the beach under an umbrella wrapped in a blanket and never getting your feet wet and jumping into the water without knowing whats’ under it.
And just to point the obvious, for companies who want to mitigate risk in any kind of equity investment, InfoWARE suite of solutions provides risk management analytics calculator like Constant Growth, Capital Asset Pricing Model(CAPM), Beta Chart, Value at Risk(VAR), Bond Valuation and a host of others. InfoWARE Chart and Analytics Executive Dashboards at a glance give timely notification to management of the direction of risk in business lines.
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