Nigerian Exchange Group
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BY EMEKA EJERE

The Nigerian Exchange (NGX) said it would drive its growth in 2022 by focusing on five strategic areas, including building on digital transformation, listings and delistings, technology, partnerships and sustainability.

Speaking at a virtual presentation tagged “Market Recap and 2022 outlook in collaboration with Renaissance Capital (RenCap), the Chief Executive Officer, Temi Popoola, said the strategies will deepen access and attract new generation of investors to the market.

He noted that last year was historic for the Exchange as the defunct Nigerian Stock Exchange (NSE) completed its demutualisation process, following statutory approvals from the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC).

The completion of the demutualization process had seen the NSE transition into a non-operating holding company, Nigerian Exchange Group Plc. (NGX Group) with three subsidiaries. While the Nigerian Exchange Limited (NGX) is the operating exchange, the NGX Regulation Limited (NGX RegCo) is the independent regulatory company and NGX Real Estate Limited (NGX RelCo) is the real estate company.

Popoola said the NGX would seek to consolidate its historic status with a new verve of digitisation by creating innovative and automated access to the market while ensuring overall quality of listed companies and ease of capital raising process.

He stated that the Exchange would deploy strategic initiatives to attract financial technology (Fintech) firms to the stock market, including launching of a Nasdaq-style board for the listing of tech companies.

“Today, globally, there are lots of capital raising from tech companies. Our market can be a source to raise this capital. SEC has already taken the leadership. It will help to drive economic growth and mobilise capital from sectors of surplus to deficit,” Popoola said.

According to him, the NGX would also accelerate the digitisation of its processes and operations to attract more investors, especially the millennials and youths, who are increasingly turning to alternative investment options.

He said the NGX would work to integrate the market to digital banks and other transactional channels in order to make the market a viable and accessible investment option to all investors.

Popoola said that as the NGX walked through 2021, many of the benefits of the demutualisation were realised making the Exchange more agile and commercialised in its operations.

He highlighted that 2021 was a generally positive year for the NGX’s suite of indices as all but three of the indices ended the year with positive returns. NGX’s flagship index, NGX All Share Index returned 6.1 per cent driven by recovering corporate earnings and improved investor sentiments. The equity capitalization rose by 5.89 per cent or N1.24 trillion during the year. The NGX Oil and Gas Index was the best performing index with a return of 52.52 per cent driven by recovery in the global oil prices and stronger performances from oil and gas companies. This was closely followed by the NGX Growth Board Index which returned 28 per cent

“In the fixed income market, capitalization grew by 12.81 per cent from N17.50 trillion in 2020 to N19.74 trillion in 2021 driven majorly by FGN Bond issuances.  Last year  saw the groundbreaking listing of BUA Cement’s N115 billion bond, the largest corporate bond. We also saw the listing of LFZC Funding SPV’s N10 billion, the longest dated corporate bond. We also saw significant uptick in the value of turnover in the fixed income as turnover grew from N1.37 billion in 2020 to N3.52 billion in 2021. This represented an increase of 158.19 per cent in the value traded. This improvement could be attributed to investors taking advantage of rising rates in the fixed income market.

“NGX also made significant progress in its efforts on the introduction of Exchange Traded Derivatives. We witnessed the official launch of NG Clearing, Nigeria’s premier Central Clearing Counter Party (CCP). The Exchange also registered seven  contracts with the SEC ahead of the launch of Exchange Traded Derivatives,” Popoola said.

Some of achievements for the year also included listing of Bricklinks Africa, NGX Group and Ronchess Global Resources Plc by introduction on the Exchange; while the fixed income market saw corporate bond issuances by BUA Cement Plc , N115 billion; CardinalStone, N5 billion; Nova Merchant Bank, N10 billion and Coronation Merchant Bank, with N25 billion among others.

 

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