FELIX OLOYEDE
Activities leading to the 2019 general election and foreign exchange movement would affect the Nigerian Stock Exchange in 2018, Oscar Onyema, Chief Executive of the exchange has disclosed.
While speaking at the 2017 Market Recap and 2018 Outlook held at the Exchange on Tuesday in Lagos, he explained that effect of political activities and currency movement would be short lived.
The Nigerian bourse boss expressed optimism that the market would improve on its 2017 performance, which saw it grew 42.3 per cent, emerging as the third best performed exchange globally.
“Indeed, to some extent, political activities and currency movements will have some effect on the market, but we expect that such impacts will be short lived and the performance of the underlying business activities will ultimately determine market performance,” Onyema stated.
He added that the market would benefit from the improved 1.9 per cent World Bank’s economic growth forecast for Nigeria, which was underpinned on improved global economy, higher crude oil price and fiscal stimulus from government infrastructure spending.
He also disclosed that NSE management would engage government on the need to privatize public assets and float them on the exchange.
The market in 2017 rode on the back of improved oil price, better ease of doing business, improvement in the forex market, especially with the introduction of the Investors’ and Exporters’ Forex Window, which helped raise investors’ confidence in the market and downward of the country’s inflation.
Despite significant improved performance of the capital last year, it recorded no Initial Public Offer (IPO).
Some companies have already interest to float IPO, said Onyema, but stressed that indication of interest does not automatically translate to new public offers.
Last year, equity market capitalization improved 47 per cent to N13.62 trillion, while value traded and volume trade were up 121 per cent to N1.27 trillion and 100.46 billion respectively.
“For the second consecutive year, domestic investment flows outweighed FPI flows, albeit marginally.
Retail trading activities during the year totaled N364 billion, representing a 39 per cent increase over 2016.
“Foreign inflows outpaced outflows in 2017, with positive net flow sustaining from March 2017, and peaking in August 2017 on the back of positive economic data releases,” the bourse CEO further explained.
Meanwhile, the bond market capitalization climbed 34 per cent, although turnover was down 24 per cent in 2017 due to investors’ decision to seek higher returns in alternative product classes.
The Federal government dominated the bond market, making 98 per cent of the N3.4 trillion bond issues last year. Only one state and three corporate issue bonds in 2017.
“Demutualization remained a key strategic focus in the year under review. Through targeted engagement efforts with our members, Securities and Exchange Commission (SEC), the National Assembly (NASS), NSE members including Association of Stockbroking Houses of Nigeria (ASHON), Corporate Affairs Commission (CAC) and other key stakeholders, we achieved the broad-based support required to secure approval for demutualization from The Exchange’s members and successfully progressed the Demutualization Bill through the first and second reading and public hearing stages of the law making process,” Onyema stressed.
