NSE LIVE! Stock market hopes to recover in 2017
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NSE LIVE! Stock market hopes to recover in 2017

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NSE LIVE! Stock market hopes to recover in 2017

The Nigerian Stock Exchange (NSE) has predicted a possible recovery at the stock market in 2017, after investors lost N604 billion in 2016.

Chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said the Nigerian capital market could witness a recovery given general expectation that the Nigerian economy will pull through economic recession and record modest growth.

He said the Exchange was optimistic on the performance of the market, although the position of the market depends on many other external factors.

“We are cautiously optimistic, as consensus estimates suggest a moderate recovery for Nigeria in 2017, provided that policy makers implement the right combination of policy measures,” Onyema said.

According to him, the Nigerian economy is expected to recover from its recession in 2017 with a modest Gross Domestic Products (GDP) growth forecast of 0.6 per cent, though this will depend largely on the vigour of fiscal policy implementation, lower rates of disruptions to oil infrastructure from resolution of the Niger Delta conflict, crude oil prices remaining above the government’s benchmark of $42.5 per  barrel, improvement in ease of doing business and other policies aimed at boosting economic productivity.

He noted that with forecasts for inflation expected to moderate due to the base effect, the monetary authorities will have more flexibility with respect to interest rates and foreign exchange regime, hence good coordination between fiscal and monetary policy should result in resolution of structural deficiencies and drive economic growth.

He said investors will continue to keep a close eye on the divergence between the interbank foreign exchange rate and other exchange rates in the country and such a convergence of foreign exchange rates in the country and the performance of listed companies will determine the level of market activity in the short term.

“Cognizant of the ever evolving economic realities on ground, the NSE will take an adaptive approach to strategy execution in 2017. In the immediate future, the NSE will focus on achieving its goal of becoming a more agile and demutualized exchange and will fast track efforts towards developing innovative products such as exchange traded derivatives to provide investors with tools to better weather economic realities in 2017,” Onyema said.

Read also: NSE LIVE! Equities lose N19bn as demand drops

He outlined that the Exchange intends to strengthen its thought leadership efforts with policymakers to drive policies that will free up the system and promote the ease of doing business in Nigeria pointing out that incentive schemes for sectors of the economy that can support a pivot to export-led economy and systematic removal of impediments to doing business and reduction of leakages will attract private sector investments.

He said in order to drive liquidity; the Exchange will enhance its cross-border integration efforts through African Securities Exchange Association’s (ASEA) African Exchange Linkage Project (AELP) model and the West African Capital Market Integration (WACMI) programme. 

“We will also continue our engagement efforts with the government to promote the listing of privatized state-owned entities, as well as engage with the private sector issuers for listings across all of our product categories. 

We anticipate that secondary market activity will be challenged initially as the impact of various policy measures work their way through the system. However, we expect to see a revival of supplementary listings, return of the new issuance market, and potentially one initial public offering (IPO) since the equity market is a forward indicator of the economy,” Onyema said.

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