Stories by Kehinde
Akinseinde -Jayeoba | Lagos
THE Chief Executive Officer of the Nigerian Stock Exchange (NSE), Oscar Onyema has expressed optimism that the Nigerian stock market would enjoy positive sentiments in the year 2021.
Speaking at the annual 2020 Market Recap and 2021 Outlook of the local local bourse, Onyema expected that the marginal reopening of businesses, normalization of the economy and revenue-diversification drive of the Nigerian government should elicit positive sentiments throughout the year, while noting that the year 2021 had started on a positive note as the All Share Index (ASI) haf already returned two per cent after 11 trading sessions.
He however added that the local bourse growth expectations should be noted with caution, as the recent second wave of COVID-19 in Nigeria and globally, may slow down renewed social and economic activities.
Giving the market reecap for the year 2020, Mr. Onyema stated that the year 2020 was indeed a historic one for global capital markets, having faced buffeting headwinds, world markets saw sharp swings and steep losses, but largely remained resilient and orderly amid rising uncertainty.
He noted that the local bourse renewed investor optimism coupled with imprllbal equity indices tracked by Bloomberg,the NSE ASI emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent.
He explained that at the close of the year, the NSE’s equity market capitalisation was up by 62.42 per cent, from N12.97 trillion in 2019 to N21.06 trillion in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96 trillion in 2019 to N1.03 trillionn in 2020. .
Oscar further revealed thatthe Federal Government of Nigeria dominated issuances on the Nigerian Stock Exchange (NSE) bond market, raised over N2.36 trillion in 2020.
The NSE bond market capitalization rose by 35.52 per cent to N17.50 trillion in 2020 from N12.92 trillion in 2019, as capital-raising activities in the fixed income market increased significantly during the year.
Onyema said that “Continuing the trend in recent years, the Federal Government of Nigeria dominated issuances, raising over N2.36 trillion which comprised 92 per cent of total bond issuances. Corporates also leveraged the low yield environment to fund expansion objectives and pursue debt refinancing, raising a total of N192 billion.
Onyema said that “Kicking off 2020, the NSE welcomed Interswitch, in a historic listing of its N23 billion 15.00 per cent Fixed Rate Series one bond. The premier bond listing, part of a N30 billion debt issuance program listed through a Special Purpose Vehicle, Interswitch Africa One Plc, illustrates the powerful potential of the Exchange to support FinTechs and growth companies across various economic sectors to achieve their growth ambitions.
“In another milestone for the Nigerian fixed income market, Dangote Cement listed its N100 billion 12.50 per cent Series one bond, under its N300 billion bond programme. The offer, which was 1.5 times oversubscribed, became the largest corporate bond issuance in Nigeria’s fixed income market.”
According to him, the NSE also welcomed Primero Plc to market as they listed their first bond on the NSE, the Primero BRT Securitization SPV Plc bond valued at N16.5 billion.
“During the year, bond yields moderated from 2019 levels, declining between one per cent to 10 per cent across various tenors, as investors sought higher returns in alternative asset classes. Consequently, the fixed income market recorded a significant reduction in trading activities, with turnover declining by 71.10 per cent by value.”
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