Preparatory to its plan to go public (also known as demutualisation), Director General of the Nigerian Stock Exchange (NSE), Professor Ndi Okereke Onyiuke, yesterday allayed fears that the Exchange will not be hijacked by few money bags as being speculated.
She disclosed also that despite the global meltdown foreign portfolio increased by 31.32 per cent to close the year 2009 at N214.741 billion from N153.457 billion recorded in 2008, while the NSE delisted nine moribund companies during the year under review.
Speaking at a world press briefing to review the performance of the Nigerian Stock Market and project for the future, she said, “ Let me assure the investing public that there was no plan to allow few wealthy Nigerians to hijack the Nigerian Stock Exchange as being speculated. We will make sure that every Nigerians that are interested in having stake in the Exchange will be accommodated when we finally demutualise the Exchange. Even we would make sure at least any Nigerian interested will get at least 200 units.
In all the Stock Exchanges around the world that have demutulaised no few people were allowed to hijack them. So the NSE will not be an exception, we will make sure nobody hijacks the Stock Exchange through demutualisation.
Onyiuke noted that at the meantime, the proposed plan to demutualised has been put on hold pending the time the market recovers fully. According to her, “ It is important to note that we can only extract maximum value from demutualisation process when we have metamorphosed into the most efficient and agile entity possible. This will happen once we have completed our transformation programme.
On foreign portfolio investment in the stock market, the NSE said, “ Despite the price declines and the shunning of risky investments, foreign investors continued to demonstrate confidence in the Nigerian economy during the year 2009. Interim statistics show purchases (inflow) by foreign investors during 2009 to be in excess of N214.741 billion, representing 31.32 per cent of the aggregate turnover- an increase, when compared with the N153.457 billion recorded in 2008. Currently, total sales (outflow) during the year were in excess of N195.583 billion, culminating in a net inflow of N19.158 billion, a reversal of the net outflow of N480.5 billioin 2008.”
Speaking on the performance of the stock market during the year under review, she disclosed that the Council of the NSE approved the delisting of nine dormant companies following the expiration of time given the companies 2009 to regularise their status with the Exchange.
According to her, “ The decision was effected on Wednesday, May 13,2009. Companies delisted were: Ferdinard Oil Mills Plc, Footwear Accessories Manufacturing & Distribution Plc, BCN Plc, Epic Dynamics Plc, Liz Olofin and Company Plc, Oluwa Glass Company Plc, Aba Textile Mills Plc and Asaba Textile Mills Plc.”
Also, she noted that 64 securities were delisted during the year under review. Analysis show that the securities delisted include: 53 fixed income securities on account maturity, including , Six FGN Development Stocks, Four State Government Bonds, 41 Industrial Loans, and two Preference Stocks.
According to her, “ Universal Trust Bank Plc was delisted following its acquisition by Union Bank of Nigeria Plc. Nigerian International Debt Fund Plc was delisted from the equity section and granted Memorandum Listing Status on December 15, 200.
While assessing the future outlook of the economy, Onyuike said, “ There are positive prospects for the Nigerian economy for 2010. The World Bank and IMF believe that the global economy would emerge from recession to record positive growth rates in 2010. specifically, IMF said it expected the world economy to grow by 3.1 per cent while the Nigerian economy is expected to grow by 5 per cent. The Economist anticipates a GDP growth rate of 5.2 per cent in 2010 while the Federal Government targets 6.1 per cent.
“ Despite the optimistic views, there are fundamental challenges to be faced during the year. The expected growth rate in 2010 would be defined by the economy’s ability to sustain the amnesty programme of the Niger Delta, the provision of basic infrastructure, management of inflationary risks from fuel price deregulation and the prevention of labour unrest. We are confident the current uncertainty in the political environment would settle soon and refrain from impacting the economy and stock market negatively.”
The NSE DG further commended the Federal Government for sustaining the issuance of bonds through the Debt Management Office (DMO), adding that for the purpose of transparency and pricing, the NSE should make the request that the DMO consider migrating trading on the Over the Counter (OTC), to the Nigerian Stock Exchange trade.