Click here to watch 2015 Market Recap and 2016 OutlookBy Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Oscar Onyema, the chief executive officer (CEO) of the Nigerian Stock Exchange (NSE) on Thursday said demutualisation is amongst the top three (3) priorities initiatives of the Exchange for 2016.
Onyema who made this disclosure at the NSE 2015 market recap and outlook for 2016 said the prioritised three (3) initiatives for 2016 is aimed at achieving the NSE’s three (3) strategic objectives of which include, Increasing the number of new listings across five (5) asset classes, increasing order flow in the five (5) asset classes; and operating a fair and orderly market based on just and equitable principles.
According to him, the capital market has an opportunity to effectively finance the Federal Government of Nigeria’s (FGN’s) proposed budget deficit for 2016 and the implementation of its Medium Term Expenditure Framework (MTEF). “With greater clarity on policy direction, we anticipate the return of investors who had remained on the sidelines throughout 2015,” he affirmed.
Onyema said the return of the investors on the sidelines is predicated upon return of investor confidence as a result of effective implementation and communication of the government’s economic blueprint; credibility in monetary policy stance, relative stability in the macro economy (Oil price stability above benchmark targets, increase in tax collection to Gross Domestic Product (GDP) ratio amongst other and improved security.
“The NSE will focus on executing its strategy in order to continue to provide a credible platform for financing the economy. To this end, we intend to intensify engagement efforts with the FGN,” Onyema added.
He noted that the downturn from 2015, has already continued into the New Year and 2016 is anticipated to be a challenging year for the capital market and the domestic economy. “We intend to continue our collaborative efforts with the new administration and other private sector players to create a framework for financing the Nation’s infrastructure and capital requirements. Additionally, we plan to work with the FGN to ensure that the appropriate messaging is conveyed to the investor community,” the NSE CEO said.
Onyema further affirmed that the current state of the market creates both challenges and opportunities for investors and believe’s that taking a portfolio approach to investing provides the best risk adjusted alternative for participating in the capital market.
He reported that the NSE’s flagship index, the NSE ASI, declined by 17.4 percent in 2015 closing the year at 28,642 points after starting the year relatively flat. “This is due to a combination of aforementioned factors including political risk, currency volatility, and uncertainty in global crude oil prices,” he added.
He revealed that the NSE Banking Index was the worst hit plunging 23.6 percent, followed closely by the NSE 30 Index and NSE Main Board Index, (both down 17.6 percent); all the NSE market indices performed poorly, relative to their 2014 performance, except for NSE Industrial Index which saw an uptick of 1.3 percent.
