Equity Market Records 121% Rise in 2017 – Onyema

BY CHINYERE OBIORA, LAGOS – The Chief Executive Officer of Nigerian Stock Exchange (NSE), Mr Oscar Onyema says the nation’s equity market recovered from the macro-economic overhang of the commodity down-cycle to become the third best performing market globally in 2017.

Onyema said the market recorded a 42 per cent return in the NSE ASI index and attributed market’s excellent performance to Central Bank of Nigeria (CBN)’s monetary policies that resulted in increased liquidity in the foreign exchange market.

Addressing the stock-broking community, analysts, media and other stakeholders in Lagos on the market performance in 2017 and the 2018 projections, the NSE boss explained that  the equity market activity recorded a huge leap from the 2016 levels with the turnover growing by 121 per cent to N1.27 trillion from N0.58 trillion recorded the previous year. 

He said though IPO activity in the year remained mute, there were several other positive indicators, including the revival of supplementary listings and the return of new issuances. 

According to Onyema, “the value of supplementary listings increased by 27 per cent, bringing the total value of equity issues in 2017 to N408 billion”.

Commenting on the issuance of bonds, the NSE Chief Executive said the Exchange fixed income market recorded mixed performance as “New bond issuances increased over the previous year, while bond yields gradually moderated from 2016 levels amidst easing inflation and greater Forex stability.”

He stated that with investors seeking higher returns in alternative product classes, yields across various tenors dropped between 0.4 per cent and 1.5 per cent while market turnover also fell by 24 per cent in the year under review. 

Onyeama also explained that supplementary issuances by the Federal Government saw bond market capitalization rising by 34 per cent year-on-year, adding that; “The NSE’s ETF market witnessed increased activity across key metrics in 2017, recording a 272 per cent year-on-year growth in trade volumes, 33 per cent growth in turnover and a 40 per cent year-on-year increase in market capitalization to close the year at N6.69 billion.”

He also stated that NSE made steady progress on its strategic focus areas set out at the beginning of 2017, even as “Demutualization remained a key strategic focus in the year under review.”

The NSE boss further said; “Through targeted engagement efforts with our members, Securities and Exchange Commission (SEC), the National Assembly (NASS), NSE members, including Association of Stock-broking 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.”

“In 2017, we amplified our efforts to establish West Africa’s first derivatives market and achieved a number of key milestones during the year. These according to him include the completion of draft rules; development of product specifications; market-wide trainings on derivatives and Clearing Counterparty (CCP) transactions. We also worked to create and enhance legal and regulatory frameworks which support derivative instruments, and have made significant progress towards securing approvals to operationalize these frameworks”, Onyeama said.

He said in keeping with its objective of taking a vigorous and adaptive approach to strategy execution, NSE has re-assessed its strategic agenda given the changing dynamics in both the operating environment and the global exchange landscape against the backdrop of the fourth industrial revolution