The Nigeria Stock Exchange the NSE has projected that there would be volatility in the nation’s equity market in the first half of this year.
The Chief Executive Officer of the NSE, Oscar Onyema who disclosed this in Lagos during market recap and 2019 outlook said that the market sentiments in the first half of the year will be driven by uncertainty in oil prices as well as the 2019 general elections.
According to him “we anticipate volatility in equities markets first half of 2019, with enhanced stability post-elections. We believe swift approval and implementation of the 2019 budget will have a positive impact on companies’ earnings as well as consumer spending. Therefore, we expect an uptick in market activity during the second half of 2019”.
Speaking further on the outlook, he said “to enhance our listing prospects, we have strengthened our government engagement efforts on privatization and listing of state owned enterprises, and we expect to take advantage of opportunities within this space during the year.
We also intend to maintain our collaborative efforts with public and private sector stakeholders to advocate for market friendly policies, and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth. The Exchange intend to work with the private sector as well, to catalyse the listing of more companies”.
Reviewing the performance of the market in 2018, Onyema noted that “NSE equity market started the year on a high note, with the All Share Index (ASI) reaching a ten-year peak of 45,092.83 in January.
This was largely driven by the positive performance of the ASI in 2017 which emerged the best in Africa. As we approached the second quarter, political risks, oil price volatility and rising global yields resulted in bearish sentiments that saw the ASI and equity market capitalization fall by 17.81 per cent and 13.87 per cent to close at 31,430.50 and N11.73 trillion respectively”.
He said While listing activity remained relatively low during the year, recording one listing and four delistings, equity turnover remained relatively stable, marginally declining by 5.45 per cent to N1.20 trillion.
He said that the turnover velocity inched up 0.91 percentage points to 10.25 per cent while the size of volumes traded in the period increased by 0.96 per cent to 101.43 billion with the Financial Services sector being responsible for the highest traded volume and value. In the year under review, foreign portfolio investments outpaced domestic participation by 1.73 per cent, accounting for 50.87 per cent of total transactions, while domestic transactions accounted for 49.13 per cent.
Within Domestic Institutional order flow was 56 per cent while retail order flow was 44 per cent.
With regards to NSE derivatives initiative, Onyema said that “our technology infrastructure has been enhanced to support the trading launch. The rulebook has been created and is currently going through the approval process alongside on-boarding of dealing members”.
