The Nigerian Stock Exchange (NSE) has said that the Federal Government raised the sum of N1.16 trillion from the nation’s bourse in 2018 to finance fiscal and infrastructure deficits.
Mr Oscar Onyema, NSE Chief Executive Officer, disclosed this at the exchange 2018 market recap/2019 outlook in Lagos.
Onyema said that the funds were raised through various bonds such also Green Bonds, Sukuk Bond and Savings Bonds.
Onyema said that government during the period listed bonds worth N1.16 trillion, alongside raising Eurobonds totalling 3.36 billion dollars to finance various infrastructure projects.
“Projections of heavy government borrowings to finance the planned infrastructure spend validated as Federal government listed N1.16 trillion in 2018,” he said.
Onyema said that capital raising was dominated by the federal government having accounted for 79.30 per cent of bond issuances during the period to finance fiscal and infrastructure deficits.
Consequently, he said that the NSE fixed income market, market capitalisation increased by 11.75 per cent to N10.17 trillion from N9.10 trillion 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 corporates declined by 39.09 per cent with a total of N31. 47 billion raised in 2018.
Onyema said that the market also witnessed 50.53 per cent increase in foreign outflows during the period from N402.26 billion in 2017 to N605. 54 billion 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 that 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 that foreign investors accounted for 50.87 per cent participation in 2018, while domestic accounted for 49.13 per cent.
He said that the exchange would continue to leverage on existing technologies to boost domestic participation in the equities market.
Onyema said that NSE was committed at making retail investors major drivers of the market.
On 2019 outlook, he said that market sentiments in the first half of the year would be driven by uncertainty in oil prices as well as 2019 general elections.
“We anticipate volatility in equities markets in first half of 2019, with enahnced stability post-election, ” he added.
Onyema said that 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 that the exchange would continue to engage both Federal and state governments as well as corporates to ensure enlistment of more companies on its bourse.