NSE CEO Engages Stakeholders on 2018 Market Recap and 2019 Outlook


Tuesday, January 15, 2019 7.00AM / Bukola Akinyele and Nifemi Taiyese  for Proshare WebTV


The Nigerian stock exchange yesterday hosted capital market correspondents and market stakeholders to a 2018 market recap and 2019 outlook session.

It was an opportunity for the chief executive officer (CEO) of the NSE, Mr Oscar Onyema, to give a review of market activities in 2018, and provide insights into what will shape 2019.

Speaking on the 2018 economic review, Mr Onyema noted that it was characterized by a slow but certain economic recovery,  that was prompted by higher oil prices, CBN’s tight monetary policy stance and growth in the non-oil sector, despite dips in domestic oil production.

At the Global level, the NSE CEO observed that despite a positive start to the year, emerging and frontier markets recorded significant declines.

Also, Geopolitical tensions and apprehensions regarding impending global trade conflicts, drove down global market performances during the year causing widespread anxiety, that led to a downward spiral in equity yields.

According to him “The NSE All Share Index (NSE ASI) reached a ten year peak of 45,092.83 in January, this was driven by the positive performance of NSE ASI in 2017”. This was true, but it ignored the 42% yield in 2017 that fizzled to a -17.81% yield at the end of 2018. Higher interest rates in Europe and America and fears of a collapse in international oil prices (responsible for 90% of fiscal revenues) led to foreign portfolio investors (PFIs) making a dash for the door as they dumped local Nigerian equities. Large domestic equity selloffs by foreign portfolio managers was a major drag on the market in 2018.   

NSE Equity Market Performance

While new company listings remained low during the year, equity turnover remained relatively stable, marginally declining by 5.45% to 1.20 trillion

There was a 50.53% increase in foreign outflows from a total of 402.26 to 605.54bn in 2018 underscoring foreign investors flight to perceived safety.

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Source: National Bureau of Statistics (NBS)

NSE Fixed Income Market Performance

In the NSE fixed income market, market capitalisation increased by 11.75% to 10.17Tn from 9.10Tn in 2017

Capital raising was dominated by the Federal Government, which was responsible for 79.30% of bond issuances during the period in a bid to finance fiscal and infrastructure deficits.

Capital raising by corporates declined by 39.09% with a total of 31.47bn raised in 2018. This gives strength to the argument that the government’s regular recourse to the capital market to fund debt servicing needs (Nigeria’s debt service as a proportion of GDP was -5.1% in 2017 and estimated by local analysts to be in the region of -5.6% in 2018.

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Source: National Bureau of Statistics (NBS)


NSE ETF Market Performance

The NSE’s ETF market witnessed reduced activity on the back of reduced risk appetite for the equities market.

The best performing ETF was the Stanbic Pension ETF as it returned 16.37%, indicative of the effect of the recently implemented multi-fund structure for Pension Fund Administrators.

Major Achievements in 2018

  • Migration of four companies to the Premium board of exchange
  • The launch  of the corporate governance index to track performance of companies that meet the most stringent corporate governance criteria.
  • Delivered 16 programs to 968 participants
  • Hosted the 5th edition of NSE-LSE Dual Listing Conference
  • Impacted 57,596 beneficiaries (42,480 students) through 175 financial literacy programmes
  • NSE Approved 62 claims valued at 15.42Mn, bringing it to a total of 65.58Mn paid out to beneficiaries within the past three years.

Outlook for 2019 Outlook

  • IMF forecasts global economic growth at 3.7%, emerging markets and developing economies to grow at 4.7% and Sub-Saharan Africa projected at 3.8%
  • NSE believes market sentiments in the first half of the year will be driven by uncertainty in oil prices, as well as the general elections.
  • NSE  believes swift approval and implementation of the 2019 budget may have a positive impact on the companies’ earnings as well as consumer spending.

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Source: National Bureau of Statistics

A question and answer session followed with Onyema responding. The question of market manipulation was raised in the discussion segment and Onyema made it clear that market manipulation is a criminal offense and that the NSE is partners with EFCC to curtail such illegal practices. He mentioned the Exchange rule that if stakeholders hear something then they must say something immediately. This brought him to mention the whistle blower platform available on the Exchange’s portal.

Talking on listing of companies the NSE CEO said that a lot of firms are not listed because they are inactive or their license has been revoked. According to him, work is being done by the Exchange to keep the companies that have been listed. It is inevitable for companies to list and de-list. To increase their listings moving forward more work would be done on investor outreach he assured.

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