Proshare Report Launch: Leveraging A Crisis And Understanding the Mega Trends of a Crucial Year

Proshare

Saturday, January 30, 2021 / 10.00AM / Ayomide Oguntoye for WebTV 


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Proshare on Thursday, January 28, 2021, hosted a virtual launch of its 12th edition of the annual review and outlook reports tagged 2020 Review and 2021 Outlook Reports.

 

The keynote speaker at the launch, Dr. Ayo Teriba, CEO, Economic Associates, gave a summary and policy recommendations for the economy, Teriba said that exports were currently falling while global capital flows were increasing, which has been a situation that started before the outbreak of the COVID-19 pandemic.

 

Teriba said that while countries globally have had to deal with the loss of export revenue, huge capital flows are still a prominent feature of the global economy.

 

According to him, emerging markets are in a race to connect global liquidity to local assets, with China leading the pack as the second-largest economy in the world and the largest exporter. Nigeria, however, is littered with vast local assets but finds itself missing out in the race to connect with global liquidity.

 

Discussing the economic status of the country, Teriba said that Nigeria has fiscal, external and systemic illiquidity, that needs to be addressed.

 

On fiscal illiquidity,  he said it was largely because the national income statement had been decoupled from the national balance sheet. He added that Nigeria runs an annual budget that is essentially an income statement with no connection with the nation's balance sheet.

 

He further stated that Nigeria is externally illiquid because the vast stock of local assets is disconnected from global liquidity. He referred to Nigeria's assets as being idle and underutilized.

 

'Nigeria needs to take national assets more seriously, know what they are, their values, and optimize them' he said.

 

The economist also suggested that Nigeria be proactive about the three global megatrends of technology, migration, and liquidity to be competitive, he cited the examples of China, India, and Brazil.

 

Nigeria according to the economist, needs to create a hatchery of investment projects, which he said was the biggest missing link in Nigeria's story of solving its illiquidity problems.

 

Teriba tasked the government to target heavy inflows of foreign direct investments (FDIs) by a wholesale listing of corporate assets and liberalization of its infrastructure and state portfolio.

 

Giving his recommendations, Teriba said the Nigerian government needed to do the following;

 

  • Recouple the national income statement and the national balance sheet 
  • Reconnect vast stocks of local corporate, physical, and intangible assets to global liquidity
  • Create a one-stop, online portal for originating and finalizing deals
  • Deal with systemic liquidity 
  • Raise capital inflows into the country
  • Ensure that there are more funds by linking revenue with assets

 

Mr. Saheed Kiaribe, Director of Research, ProshareNg, in giving a review of the 2020 equities market said that the NSE ASI grew by 50.3% in 2020 making The Exchange the highest yielding amongst other Exchanges, despite a production shutdown and job losses. He reported that most market gains took place in the fourth quarter of the year 2020 after the loss recorded during the thick of the pandemic. He mentioned that a bullish reversal was recorded in the market in July 2020, with a rise of 14% in both November and December 2020.

 

Analyzing the effect of the Naira devaluation on the equities market, he said that in the last 10 years, the NSE market cap has continually dropped, each time the Naira to Dollar exchange rate changed.

 

The Proshare Director of Research noted that in 2020, the NSE market cap in dollar terms closed at $55 billion which is below the peak of $84 billion recorded in 2013.

 

Giving an analysis of the market turnover, he said the total volume traded in the year 2020 increased by 21.69% as against a 22% decline recorded in 2019. Total value also increased by 6.43% in 2020 as against a decline of 21% in 2019. The Market also recorded 57 gainers to 66 losers as against 34 gainers to 98 losers in 2019.

 

He also reported that the financial sector outperformed other sectors in 2020, contributing about 68% to the Nigerian Bourse total volume. 

 

According to the report, there was a drop in foreign participation in equity trading which suggests foreign investors may have sort for better returns elsewhere.     

 

Mr. Teslim Shitta-Bey, Chief Economist and Managing Editor, Proshare, in his presentation, gave the following key developments to watch from the 2021 economic outlook report.

 

  • The GDP growth rate projected to hit 1.3% by Q2 2021
  • The economy was likely to experience a slow growth rate
  • Inflation will remain as double-digit inflation between 14.5% and 15.1%
  • Nigerian's debt burden will remain high but local assets can be developed to generate capital inflows.
  • The Purchase Managers Index might not record a rise beyond 51.5%
  • Low domestic productivity was making the country uncompetitive in the global markets.
  • Capital importation would record an uptick which would allow for improved growth rate and enhance capacity to improve employment

 

He was of the view that it was time to rethink and reimagine how the Nigerian economy could be productive in a manner that could create jobs, and attract increased investments as domestic inflation rates down between Q3 and Q4 2021.


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Related News on Proshare's 2020 Review and 2021 Outlook Reports

1.     Complete Report: Goodbye 2020, Hello 2021, Understanding the Mega Trends of a Crucial Year for an Economy - Jan 28, 2021

2.    Executive Summary: Goodbye 2020, Hello 2021, Understanding the Mega Trends of a Crucial Year for an Economy - Jan 28, 2021

3.    Complete Report: The Nigerian Capital Market Report 2020: Leveraging a Crisis - Jan 28, 2021

4.    Executive Summary: The Nigerian Capital Market Report 2020: Leveraging a Crisis - Jan 28, 2021

5.    Newspost: Outlook 2021: Understanding the Mega Trends of a Crucial Year for an Economy

6.    Newspost: The Nigerian Capital Market Report 2020: Leveraging a Crisis

 

Proshare Nigeria Pvt. Ltd.


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1.      Economic Associate's Conference on 'Nigeria's Economic Outlook' To Hold On Feb 19, 2020 - Jan 08, 2020

2.      Liquidity Still The Key Factor in Nigeria's Economic Stability in 2020 - Dr Ayo Teriba - Dec 17, 2019

3.     Economic Associate's Conference on Nigeria's Economic Outlook, To Hold On Dec 12, 2019 - Nov 21, 2019

4.     Economic Associate's Conference on 'Nigeria's Economic Outlook', to hold on July 17, 2019 - Jun 17, 2019

5.     Africa Economic Outlook - Ayo Teriba - May 30, 2019

6.     Economic Associate's Conference on 'Nigeria's Economic Outlook', to hold on April 10, 2019 - Mar 29, 2019

7.      Economic Associate's Conference on 'Nigeria's Economic Outlook', to hold on September 27, 2018 - Aug 29, 2018

8.     Economic Associate's Conference on 'Nigeria's Economic Outlook', to hold on June 21, 2018 - May 21, 2018

9.     One-day Quarterly Conference on 'Nigeria's Economic Outlook', to hold on April 26, 2018 - Apr 10, 2018

10.  One-day Quarterly Conference on 'Nigeria's Economic Outlook', to hold on 14 December 2017 - Nov 28, 2017

11.   Dr. Teriba to Discuss Nigeria's Economic Outlook on September 28 - Sep 12, 2017

12.   One-day Conference on 'Nigeria's Economic Outlook' by Dr. Teriba to hold on Sept 28 - Aug 29, 2017

13.   Economic Associates States Report - July 2017 Edition - Jun 30, 2017

14.   Economic Associates' Q1 2017 Review and Outlook for the Year - Apr 04, 2017

15.   One-day Conference on Nigeria's Economic Outlook - Sep 06, 2016


Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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