Operators at the Nigerian Stock
Exchange (NSE) are optimistic that some of the successes recorded at
the just concluded elections in the country should restore investors’
confidence and further boost market performance.
Finance analysts at Vetiva Capital
Management Limited, a financial service company, said the market is
expected to perform better in the coming months, barring any negative
surprises on the political front, adding that “a post-election rally in
the equities market and increased portfolio flows from developed
markets” are expected as investors search for higher returns.
Market analysts also said that the outlook of the bond market will be positive in the coming months.
Rilwan Belo-Osagie, managing director
and chief executive officer of the First Securities Discount House
(FSDH) Group, said, “At the moment, bond yields are high because
interest rates are high. Maybe in the next two years the bond yield may
drop, but for most of this year I still see interest rate being high.”
Fragile confidence
Ese Onosode, chief executive officer of
FSDH Securities Limited, a stockbroking firm, said investors’
confidence in the market is still a little bit fragile, especially
retail investors within the system.
However, Mr Onosode said it will no longer take time for investors’ confidence to be restored.
“For now, what we are seeing in the
market is more foreign investors who are taking bold steps in
investment. But with time, we (operators) believe that by the time the
election results are fully out and there is a certainty as to stability
in our economy, even the retail investors’ confidence should pick up,”
he said.
He added that all international signals
from foreign investors give optimistic projection in the Nigerian
market, “therefore, what we are hoping now is that the confidence seen
internationally will filter down to local investors and make our market
a bit more buoyant.”
Speaking on the proposed
demutualisation of the NSE, Mr Onosode said, “We support the whole idea
of demutualisation, especially since it is some time that even the big
stock markets around the world already started.”
Demutualisation is transforming the Stock Exchange from being a self-regulatory organisation to a public company.
“For instance, the New York Stock
Exchange and London Stock Exchange are private entities. So the whole
process of privatising the Nigerian stock market is a good idea going
forward,” he further said. However, he said what stockbrokers expect is
a transparent process whereby all the major players involved are
carried along in the process “so that it doesn’t look like a process
whereby certain people corner the shares of the NSE when it becomes
privatised.”
Current market performance
At the close of trading activities last
Friday, the NSE market capitalisation of the 194 First-Tier equities
closed lower at N8 trillion from Thursday’s figures of N8.081 trillion,
reflecting N81 billion losses or one per cent decline.
The NSE All-Share Index last Friday
also declined by one per cent or 251.48 units to close at 25,041.68
basis points, from the previous day’s figures of 25,293.16 basis
points.
The NSE had recorded a total loss of
N449 billion in March, after recording significant losses of N260
billion in the preceding month.
In the mean time, while Emmanuel
Ikazoboh, the Exchange’s interim administrator, completed his term last
Friday, Oscar Onyema, the new CEO of the NSE, is expected to roll out
his full plans for the market to give investors a sense of what he has
to offer.
Mr Onyema, who resumed office on April
4th, had said that part of his agenda is to further boost foreign
participation in the market while he continues to woo indigenous
investors.
David Amaechi, an executive member of the Shareholders Association
of Nigeria, said Mr Onyema should make demutualisation of the NSE one
of his priorities, “to enable the market community own the Exchange so
that few hands don’t hijack the whole market.”
