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Weekly Updates3.2.3. Academic qualifications and professional development of the investors and practitioners
The summary of responses on academic qualifications and professional development of respondents are as indicated in Tables 4 and 5. From Table 4, it is conclusive that greater percentages (58.3%) and (70.4%) of the investors and practitioners, respectively, held Bachelor of Science (B.Sc.), while, 3(25%) and 7(13%) of the investors and practitioners, respectively, held Master of Science (M.Sc) all in Estate Management.
The responses of the investors and practitioners on the numbers of training conferences and/or workshops, on property portfolio diversification, they have attended in the last five years, are reported in Table 5. The analysis established that greater percentages of the two groups have not been developing their knowledge in the area of portfolio analysis and diversification.
Specifically, it is shown in Table 5 that 5 (41.7%) of the respondents among the investors and 34 (63%) of the practitioners have not attended any conference or seminar in the area of portfolio diversification within the last five years. Another 5 (41.7%) and 15 (27.8%) of the investors and practitioners respectively have attended between 1 and 5 of such conferences while 2 (16.7%) of the investors and 5 (9.3%) of the practitioners attended between 6 and 10 conferences. This suggests that most investors and practitioners alike might not have been trained on the techniques of MPT, since the immediate previous analysis in this section have shown that most of the respondents held Bachelor of Science (Estate Management) degree only. Meanwhile, the author's observation of the curricula of some universities showed that, for most of the universities, the concept of portfolio theory and diversification are taught at the postgraduate level. This might have influenced respondents' decisions towards naive diversification strategies since the methods require little or no pre-requisite knowledge before they could be used.
3.2.4. Relationship between practitioners academic qualification and their choice of diversification strategies
For a better establishment of the above, the study further examined the relationship that existed between the practitioners' educational qualifications and experience on one hand and their choice of diversification strategies on the other. The result of cross tabulation and Chi-square test indicated that there was a statistically significant relationship between educational qualifications and practitioners' choice of diversification strategies. For example, the analysis in Table 6 establishes that 7 (77.78%) of the 9 Higher National Diploma certificate holders used naive diversification strategies. Whereas, only 1 (11.11%) of them was using MPT based strategies, while 1 (1.11%) was using both strategies. In similar vein, 23 (60.53%) of the 38 B.Sc graduates preferred naive diversification strategies, while 7 (18.42%) of them used both naive and MPT based diversification strategies. On the contrary, out of the respondents with M.Sc degrees (7 in all), 4 (57.14%) claimed that they were using MPT based diversification strategies. It can thus be inferred that, the lower the academic qualification of practitioners, the higher the likelihood of using naive diversification, while the higher the qualification, the higher the likelihood of using MPT based diversification strategies. Using Chi-square test, the relationship between practitioners' qualifications and their choice of diversification strategies was found to be significant at 93.4% confidence level (0.066 level of significance). This result confirmed the outcome of the preceding analyses in this paper. However, no clear relationship was found between the practitioners' years of post qualification experience and their choice of diversification strategies (Chi-square value was only significant at 0.858 level) (See Table 7).
The foregoing analyses support the fact that investors and practitioners in the Nigerian property market were using naive diversification strategies in their portfolio selection decisions mainly because of the small size of many of the investors' portfolios. Also, there is evidence to suggest that the respondents might not have been trained on the techniques of MPT based diversification. However, it has been noted earlier in this paper that without the maintenance of a comprehensive data and information base in the property market and the economy at large, the practice of MPT based diversification analysis would be impossible. In other words, even if the investors and practitioners are well vast in the knowledge of the strategies of MPT, lack of good time series data for a meaningful comparative analysis may render the strategies impracticable. As such, the next analysis tries to investigate the availability of performance indices and their usage.
3.2.5. Availability and usage of information
The paper examines the sources of information employed by investors and practitioners in their diversification analysis to establish the presence or otherwise of free flow of information. In doing this, questions were asked that required the respondents to rank certain pre-conceived sources in their order of usage. The analysis in Table 8 shows that the most frequently used sources of data and information for real estate diversification decisions were in-house data from files and information from other practitioners. The use of in-house files as a source of information ranked first and second among the investors and estate firms respectively. In similar vein, the use of information from practitioners ranked second and first, respectively, among the investors and the estate firms. Market survey was rarely used, while databank on return indices (either individual company's index or centralised one) was not in use. This result is not unexpected because Olaleye (2004) had earlier shown that there was no centralised databank or market index in the Nigerian property market, a condition which was attributed to the secrecy attached to property transactions data in Nigeria. Therefore, this dearth of data and information in the property market might have also influenced the use of naive diversification strategies.
3.3. Investors' and practitioners' opinion on factors influencing choice of diversification strategies
As part of the objectives of the paper, this section assessed the respondents' perception of the factors conceptualized to be impacting on choice of diversification strategies. Responding investors and practitioners were asked to rank the factors, on a 4-point rating scale in terms of most important, important, of less importance and not important, depending on their assessment of the importance of the factors to their diversification decisions. The ranking were then assigned scores of 3, 2, 1 and 0 for most important, important, of less importance and not important respectively. The analyses, which were resolved by means of frequency counts and means, are as indicated in Tables 9a and 9b for investors' and practitioners' responses respectively.
The results of the means in Table 9a revealed that the responding investors believed that their overall expectation of the benefits of diversification schemes had the greatest influence on their choice of diversification strategies. This factor ranked first in the investors' ranking with a mean value of 2.083. The need to reduce operating costs and the availability or otherwise of data/information required for constructing a diversification scheme were ranked second and third respectively. Their mean values are 1.917 and 1.750. The issue of the convenience in managing the different constituent properties in a portfolio was ranked fourth in the order of importance by the investors, while they considered the effect that certain areas might have on their portfolio returns as the fifth important factors in the choice scale (see Table 9a for details).
With regards to the practitioners, the results in Table 9b showed that the need to consider the investors' overall expectation of the benefits of diversification schemes was also ranked as having the greatest influence on practitioners' choice of diversification strategies. (Mean = 2.435). However, unlike the ranking in the investors' choice scale, the need to consider the effect that certain areas might have on portfolio return (which ranked 5th among the investors) was seen as the factor having the second most important influence on the choice of diversification among the practitioners. The need to reduce operating costs on a portfolio and the issue of convenience in managing the different constituent properties of the portfolio were both ranked third by the practitioners.
From these results, six main factors are considered as having, at least, important influence on the market players' choice of diversification strategies given their mean values which ranged between 1.750 and 2.435. These are: (i) the investors' overall expectation of the benefits of diversification strategies, (ii) the need to reduce management operating costs of a portfolio, (iii) the issue of convenience in managing the constituent properties, (iv) the effects that certain areas might have on the returns from portfolio, (v) market players' education and knowledge of alternative diversification techniques and (vi) the availability or otherwise of data in constructing diversification schemes. Factors such as, the ease of dealing with some states and local governments, the vulnerability of some areas to natural or artificial disasters and market players' ability and accessibility or lack of it to computer programs for portfolio analysis were found to be of less importance to diversification decisions in the Nigerian property market.
4. CONCLUSIONS
In the paper's examination of how property market nature has impacted on choice of property portfolio diversification strategies, the results of the analysis showed that the Nigerian property market was an emerging market. Investors' portfolios were found to be of small sizes, while there was dearth of transaction data in the market. The results also showed that greater percentages, (58.3%) and (70.4%), of the investors and practitioners respectively held B.Sc Estate Management degree certificate. Only (25%) and (13%) of the investors and practitioners, respectively, had additional qualification in the form of M.Sc and M.B.A. The results also showed that greater percentages of the two groups have not been developing their knowledge, by way of attending conferences, workshops and so on, in the area of portfolio analysis and diversification. In addition, the results of the relationship between the practitioners' educational qualifications and their choice of naive diversification strategies showed that the lower the academic qualification, the likelihood of using naive strategies and the higher the qualification the likelihood of using MPT based strategies. The results of the investors' and practitioners' perception of how the factors influencing diversification choices have affected their decisions showed that: (1) investors are risk averse and will prefer more return to less and less risk to more; (2) the underdeveloped nature of the Nigerian property market, judging from the lack of information and the market players' low level of education and knowledge of MPT based diversification techniques have influenced the choice of naive strategies.
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