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;
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.
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.
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
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