By Dipo Olowookere
Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema, has disclosed that the equities market would be impacted this year by currency movements and political activities in the country.
Speaking on Tuesday while presenting the stock exchange 2017 Market Recap & Outlook for 2018 in Lagos, the NSE chief said despite these, the outlook for the Nigerian capital market remains encouraging.
Next year, the country will head for the polls to elect new leaders and politicians seeking elective positions will begin campaigns this year. This, he said, will have a huge effect on the market, but stressed it would be short-lived.
“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,” Mr Onyema stated.
Speaking further, the NSE boss said in keeping with its objective of taking a vigorous and adaptive approach to strategy execution, the stock exchange has re-assessed its strategic agenda in light of changing dynamics in both the operating environment and the global exchange landscape against the backdrop of the fourth industrial revolution.
This, he said, culminated in a new corporate strategy for the 2018 – 2021 period.
“Our efforts will be geared at satisfying our customers, boosting our domestic retail segment, and enhancing our organization for a demutualized structure,” he assured.
He said the NSE was on track to become a more agile and flexible demutualized securities exchange.
“We are hopeful that the Demutualization Bill will be signed into law in 2018, and are working assiduously with our Advisers to fine-tune outstanding aspects of the demutualization project as well as providing clarity and transparency on the process via regular engagement with all our valued stakeholders”
“In 2018, NSE will launch Exchange Traded Derivative instruments and continue to engage with the government on privatization and listing of state owned enterprises in collaboration with the private sector. We also plan to maintain our role as an advocate for the adoption and implementation of market friendly policies,” Mr Onyema said.
On the overall market performance last year, the NSE chief said the equity market activity skyrocketed from 2016 levels, as market turnover increased by 121 percent to N1.27 trillion from N0.58 trillion.
He stated that, “IPO activity in the year remained mute, however, there were several other positive indicators including the revival of supplementary listings and the return of new issuances.
“The value of supplementary listings increased by 27 percent, bringing the total value of equity issues in 2017 to N408 billion.”
On bonds, Mr Onyema remarked that the NSE fixed income market recorded mixed performance.
“New bond issuances increased over the previous year, while bond yields gradually moderated from 2016 levels amidst easing inflation and greater FX stability.
“Yields across various tenors declined between 0.4 percent and 1.5 percent, and market turnover declined by 24 percent in 2017, as investors sought higher returns in alternative product classes.
“However, supplementary issuances by the Federal Government saw bond market capitalization increase by 34 percent year-on-year.”
Adedapo Adesanya