The National Association of Securities Dealers (NASD) OTC Market Report 2018

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Wednesday, February 06,  2019  06:10 PM / Proshare MARKETS        

                   

Introduction 

Making Financial Boxes Disappear in an Era of Uncertainty 

Stock markets have brought tears to the eyes of investors in 2018. The problems have not exactly been that of the markets themselves as it has been one of the global and local challenges facing diverse economies. Nigeria has seen its economy grow by a laggard +1.81% in Q3 2018 as budget deficit has risen to -5.1% of collected revenue. This has resulted in two difficult developments:

 

  1. Public sector resort to the capital market to bridge funding gaps has driven up the local cost of funds to private borrowers. This has reduced production (recent PMI for January 2019 was 58% down from 61% in December 2018) and employment (unemployment figures for December 2018 was 23.1%). The production and retail sector growth declines translated into a drag on stock prices and a fall in Market Indexes across traded securities.

 

  1. A rise in money market interest rates and increases in monetary policy rates in Europe and America has led global money and equity investors to rebalance portfolios and adopt a less aggressive approach to equity markets as money market instruments begin to spike. Indeed net asset values (NAVs) of mutual funds in Nigeria have seen values rise significantly for money market mutual funds and dip for equity-based funds. Fixed and mixed income mutual funds have had a modestly unsuccessful time attracting superior returns.

 

Graph 1: Nigeria’s Fiscal Deficit as % of GDP Ratio 2008-2017

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Source: National Bureau of Statistics (NBS)

 

 

The emerging global financial ecosystem is, therefore, laying a sledgehammer to past barriers to entry and exit across markets. Not only are foreign portfolio investors (FPIs) determining the swings in advance economies they are equally shaping movements in emerging markets, therefore, the good old days where market information reliability and timeliness were of limited concern are over. Today information is as central to the lives of markets as blood is to the sustenance of life. In the new ecosystem, quality and speed of information are at the heart of proper assets valuation and arbitrage strategies. The Lords of the market are no longer those with the biggest-sized portfolios but those with the fastest and smartest access to qualitative and actionable market intelligence. 

Thinking outside the box was a brilliant management and portfolio strategy a decade past, but in the new financial world of digitally-modified and tactically-impatient markets, the box has disappeared. Information is an actionable variable that determines whether people will lose or win in the new financial landscape. Money, of course, remains important to potential investment yields, but its potency as an investment factor has been tempered by the power of information that runs on steroids, as it zipping down telephone lines, sizzling through binary codes and whizzing past analogue machines tearing holes in the pockets of the slow and piling cash into the wallets of the fast and clever. 

New asset trading floors are increasingly providing investors an opportunity to deepen and widen investment portfolios. Competition amongst the different tradeable securities markets is making asset pricing more efficient and reliable as investors are no longer restricted to the imperial monopoly of one market or one set of asset classes. 

 

Chart 1: Technology-Market Evolution Matrix-NASD Report -Proshare

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The New Imperatives 

The borderless investment world that is increasingly emerging has created previously unthinkable opportunities for markets such as the NASD OTC.  But sustainability must still require:

 

  • Close oversight and fast information-sensitive pricing
  • High standards of Corporate integrity and transparency
  • Innovativeness and creativity in listing investible asset classes
  • Fast and reliable intraday market broadcast
  • Regular engagement between market regulator and investors
  • A robust digital platform that makes trading easy and convenient especially through handheld devices such as android telephones
  • The application of Artificial Intelligence (AI) to maintain relationship between the investor and the market, with market information tailored to the specific investment orientation of the investor e.g. passive, aggressive or ambivalent.

 

Goodbye Yesterday, Hello Tomorrow 

Investors only see yield and risks not borders or nations. Money and capital markets are one big alphabet soup of winners and losers. Yesterday the names and sizes of countries and continents were crucial to investor interest, but today and definitely tomorrow investors are more squarely hooked on yields and risks. The number of green plusses relative to red minuses regardless of continent or country will decide where the big bucks go. 

It is this context that the engagement with investors is crucial to market success. Expanded and timely Information dissemination on the NASD OTC is not a me-too exercise in ego-tripping; it is an imperative shift towards meeting the market of the present and future at their critical touch points; it separates a market with big aspirations for sustained growth from one with a small appetite for the future and a willingness to disappear into the twilight of investment martyrdom.

 

Do feel free to share your opinions/observations and feedback with us vide content@proshareng.com and/or research@proshareng.com

Download Full PDF Report Here

 

Visit the NASD Page here

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9.      Proshare NCM 2018 Review and 2019 Outlook (10) - NSE ASI Performance Review and How Each Company Fared in 2018

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12.   Proshare NCM 2018 Review and 2019 Outlook (7) - Bond Market: Safety In A Season Of Uncertainty

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14.   Proshare NCM 2018 Review and 2019 Outlook (5) - Market Records 8.53% Growth in Q1’18; Negative Sentiment Permeates in Subsequent Quarters

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Read all News related to NASD here

 

Related News/Links on NASD

1.       NASD Data Portal Now Available To All Stakeholders

2.      ProvidusBank Plc Now Trading On The OTC Market

3.      NASD Supports Initiatives to Ease Capital Raising for Growth Enterprises

4.      NASD OTC Market CAP Declined By -0.24% To N489.22bn

5.      Resourcery Plc Holds 28th Annual General Meeting As NASD OTC Market CAP Declined To N490.40bn

6.      NASD OTC Market CAP Declined By -0.14% to N493.35bn

7.      NASD OTC Notifies of New Rules

8.     NASD Present At 1st Nigeria-Canada Investment Summit; USI Up By 2.84% WoW

9.      Food Concept Plc Holds 16th AGM; NASD USI Down By -2.19% WoW

10.  NASD Market CAP Declines by -0.22% WoW to N485.11bn

11.   NASD Officially Joins the Lagos Chamber of Commerce and Industry

12.  NASD OTC Market CAP Drops by -1.53% to N478.73bn

13.  NASD OTC Exchange Records Outstanding Performance in Q3 2018

14.  Societe Fonciere Europeenne Secures Approval to Make a Mandatory Take-Over Offer in Ensure Insurance

15.   NASD OTC Securities Exchange Unlisted Shares Continues to Rise; Up 20% YTD

16.  NASD OTC Market Closes The Week On a Negative Note; USI Down By 2.05%

17.   NASD OTC Market Ends The Week On a Positive Note; USI Up By 2.83%

18.  NASD OTC Market Ends The Week Negative; USI Down By -0.24%

19.  NASD Market CAP Closed Higher at N470.17bn

20. NASD USI Gained 0.71% WoW

21.  ASEN Inaugurated; NASD USI Declines by 2.6% WoW – 110818

22. NASD Releases Exposure Draft of Proposed Rules; NMRC Held 4th AGM

23. NASD Market Cap Closed Higher by 1.2%; LBIC Shareholders Approve Admission To NASD

24. NASD USI Increased By 1.2%; ARM Life Plc Holds 20th AGM

25.  NASD OTC Closed the Week Positive as Niger Delta Exploration and Production Plc Gains 20% WoW!

26. NASD OTC Closed The Week Positive; USI Up By 1.13% WOW

27.  NASD Plc to Hold 5th AGM on July 11th, 2018; USI Sheds 1.13% WoW

28. NASD OTC Market Closed Red by -0.1% WoW

29. NASD OTC Market CAP Sheds 1% WoW to Close at N446.65bn

30. Investors On NASD OTC Exchange Record N1.76bn Loss WoW

31.  Fan Milk, Swap Technologies to Hold AGM as NASD USI Inches Up by 0.67% WoW

32. NASD Introduces Trade Alert Notification Service; CSCS Holds 24th AGM

33. NASD USI Sheds 1.48% WoW

34. NASD USI Sheds 3.6% WoW

35.  NASD USI Gains 3.2% WoW

36. Official Launch of the NASD Enterprise Portal (NASDeP)

37.  NASD launches Enterprise Portal, to transform Nigeria’s Investment Environment

38. SEC Corporate Governance Scorecard Now Applies to All Public Companies in Nigeria, NASD Inclusive

39. NASD Relaunches BITs Trading Platform

40. NASD Security Categorisation Methodology

41.  NASD introduces its Enterprise Portal to Capital Market Operators

42. NASD OTC Introduces its Enterprise Portal to Market Stakeholders

43. New Policy On Stock Promotion, Establishing Best Practices To Enhance Market Transparency Released

44. Lighthouse Financial Services Plc Admitted to Trade on NASD OTC

 

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