The Nigerian Stock Exchange on Monday said the Federal Government raised N1.16trn from the nation’s bourse in 2018 to finance fiscal and infrastructure deficits. NSE Chief Executive Officer, Mr. Oscar Onyema, disclosed this at NSE’s 2018 market recap/2019 outlook in Lagos.
Onyema said the funds were raised through various bonds such as Green Bonds, Sukuk Bond and Savings Bonds. Onyema said the government listed bonds worth N1.16trn during the period, alongside Eurobonds totalling $3.36bn to finance various infrastructure projects.
“Projections of heavy government borrowings to finance the planned infrastructure was validated as Federal government listed N1.16trn in 2018,” he said. Onyema said the capital raising was dominated by the Federal Government having accounted for 79.30 per cent of bond issuance during the period to finance fiscal and infrastructure deficits.
Consequently, he said, NSE’s fixed income increased by 11.75 per cent to N10.17trn from N9.10trn in 2017. He stated that turnover also increased by 22.34 per cent, compared with 2017 driven by a search for an alternative asset class opposed to equities. According to him, capital raising by corporate entities declined by 39.09 per cent, with a total of N31. 47bn raised in 2018.
Onyema said the market also witnessed 50.53 per cent increase in foreign outflows during the period from N402.26bn in 2017 to N605. 54bn in 2018. He attributed the trend to attenuated foreign participation due to shift to higher yielding assets with lower risks in developed countries, coupled with the impending political risks in the coming elections.
Onyema said the NSE market capitalisation in 2018 dropped by 14 per cent to close at N13.61 trillion against N11.73 trillion achieved in 2017. On investor participation, Onyema said foreign investors accounted for 50.87 per cent participation in 2018, while domestic investors accounted for 49.13 per cent.
He said the exchange would continue to leverage existing technologies to boost domestic participation in the equities market. Onyema said NSE was committed to making retail investors major drivers of the market. On 2019 outlook, he said market sentiments in the first half of the year would be driven by uncertainty in oil prices as well as the general elections.
“We anticipate volatility in equities markets in first half of 2019, with enahnced stability post-election,” he added. Onyema said swift approval and implementation of the 2019 budget might have a positive impact on companies’ earnings and consumer spending.
“Therefore, we anticipate a return of listings during the year with an uptick in market activity during the second half of 2019,” he said. Onyema said the the exchange would continue to engage Federal and state governments as well as corporates to ensure enlistment of more companies on the bourse. The Punch
Pix: Nigeria Stock market