NSE Helps Investors Recover N305m Shares, Get N17m Compensation

By Dipo Olowookere

In 2020, the Nigerian Stock Exchange (NSE) facilitated the restitution and recoveries of shares worth N305.11 million for investors.

Also, the exchange assisted not less than 49 investors/claimants who suffered pecuniary losses to get compensation worth N17.02 million in the year.

The Chief Executive Officer of the NSE, Mr Oscar Onyema, while speaking Tuesday during the review of the bourse’s performance last year and what to expect in 2021, assured that the exchange will continue to protect investors to deepen the market.

He also said reiterated the intention of the exchange to aggressively pursue cutting-edge products and services, access new markets and deliver better value to its stakeholders.

Mr Onyema described “the year 2020 [as] a historic one for global capital markets,” especially the Nigerian market, which recorded a growth of over 50 per cent despite the “buffeting headwinds.”

He attributed this to the “renewed investor optimism coupled with improved economic conditions and low fixed income yields.”

“Of 93 global equity indices tracked by Bloomberg, the NSE All-Share Index (ASI) emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent,” he said.

He noted that this year, the bourse has started “on a positive note as the ASI has already returned 2.0 per cent after 11 trading sessions.”

“We expect the marginal reopening of businesses, normalisation of the economy and revenue-diversification drive of the Nigerian government to elicit positive sentiments throughout the year,” he added, warning that, “Our growth expectations should be noted with caution, as the recent second wave of COVID-19 in Nigeria and globally, may slow down renewed social and economic activities.”

Mr Onyema expressed optimism that the exchange’s vision to be Africa’s preferred Exchange Hub would be achieved with the transitioning of the NSE to a demutualised exchange group and the appointments of Mr Temi Popoola as the CEO of NGX and Ms Tinuade Awe as CEO of NGX REGCO.

Last year, the Nigerian equities market got off to a strong start, returning 10.4 per cent by the eighth trading session and by October, it entered a much-awaited bull run.

Buoyed by the formal declaration of the U.S president-elect, unattractive fixed-income yields and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of 14.90 per cent recorded in 2019.

During its remarkable year-end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility.

At the close of the year, the NSE’s equity market capitalization was up by 62.42 per cent, from N12.97 trillion in 2019 to N21.06 trillion in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96 trillion in 2019 to N1.03 trillion in 2020.

Although Initial Public Offering activity was mute, the value of supplementary issues increased dramatically from 2019, rising by 851.37 per cent to N1.42 trillion, from N148.77 billion.

Also noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (retail: 44.98 per cent; institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent.

Capital-raising activities in the fixed income market increased significantly in 2020 as the NSE’s bond market capitalisation rose by 35.52 per cent from N12.92 trillion in 2019 to N17.50 trillion.

Continuing the trend in recent years, the Federal Government of Nigeria dominated issuances, raising over N2.36 trillion which comprised nearly 92 per cent of total bond issuances. Corporates also leveraged the low yield environment to fund expansion objectives and pursue debt refinancing, raising a total of N192 billion.

Business Post reports that apart from Mr Onyema, a presentation was made by the Managing Director/Chief Economist, Africa and the Middle East, Global Research at Standard Chartered Bank, Ms Razia Khan, who provided insights into the global macroeconomic environment and the outlook and opportunities in the Nigerian capital market.