Business
Nigeria’s Capital Market In 2015
The Nigerian Capital
Market and its operators made efforts that would have resulted to being the best market in Africa, but for the many economic crises faced by the nation’s economy in 2015.
The capital market in retrospect was saddled with the innovations, the woes and gains which formed the basis of analysts’ judgement of how poor 2015 transaction faired.
This accounted for why the Chief Executive Officer (CEO) of Nigerian Stock Exchange, Mr Oscar Onyema urged retail investors to mitigate investment risks by diversifying portfolios across different asset classes.
Onyema also explained that the capital market was only reacting to the global economic and financial challenges within a well regulated market structure.
The experiences and qualifications of market operators and regulators had little answers to give to the foreign investors whose main concerns were their business gains, rather than the uncertainty.
This also accounted for the flow or movement of more foreign investors out of the Nigerian capital market to other African markets, where they think the stakes are high.
Foreign outflows as at November 30, 2015 according to reports, amounted to N40.73 billion compared with N31.87 billion foreign portfolio managers invested in the same period.
The capital market remained unstable with naira exchanging for more than N230 per dollar through the better part of 2015, as the Central Bank of Nigeria’s (CBN) policies tried in vain to stabilise the naira against the dollar.
The financial market was generally stable for 2014 although noticeable fluctuations were traced toward the end of the year. A number of policy instruments were deployed to achieve price and financial system stability in order to boost investor confidence and reduce concerns about declining foreign exchange reserves.
Some of the policy instruments deployed by CBN include, Monetary Policy Rate (MPR), Open Market Operations (OMO), Discount Window Operations, Cash Reserve Ratio (CRR) and Foreign Exchange Net Open Position (NOP) Limit.
Others are devaluation of Naira, limit on outside spending and the excess control, checks and sledge hammer on bureau de change.
Analysts also attributed the major part of the problem to the 2015 election and change of leadership which brought serious uncertainty especially in the delay of the new president in appointing his ministers.
Investors found it difficult to predict what the economy would look like under the new administration, resulting to market watch instead of investments.
The Director General of securities and Exchange Commission (SEC), Mr Mounir Gwarzo expressed dissatisfaction with the capital market performance in 2015. He said he was unhappy the way the market was which he said was a true reflection of the nation’s economic situation.
Gwarzo said SEC is studying how government can use some fiscal policies to stabilise the market and encourage domestic investors to return to the market.
Market Statistics Of Cap /Index
The SEC DG’s feelings cannot be unconnected with the capital market performance at the end of 2015. Nigerian Stock Exchange records show that as at December 31st, 2015, the All Share Index (ASI) droped by about 17.36 per cent to close negatively at 28,642.25 points, compared with the opening index of 34,657.15 points Also,market capitalisation that opened trading for 2015 at N11.478 trillion, lost N1.63 trillion to close negatively on December 31 at N9.851 trillion.
Bond:
The FMDQ OTC Securities Exchange that promotes transaction in fixed income securities in Nigeria, listed N30 billion Fidelity Bank Bonds, N8 billion Nigeria Mortgage Refinance Company (NMRC) Bonds, N26.0 billion FC MB financing SPV Bonds on its platform.
Innovations
The Nigerian Stock Exchange led by Mr Oscar Onyema however brought landmark innovations to the market during the period under review.
NSE ratified the recapitalisation, the e-dividend system and laid a foundation for de-mutualisation of the 55-year old NSE.
Approval was given for direct cash payment of the proceeds from the sale of securities into an investor’s nominated bank account.
This if well implemented would curb the excess of the stock brokers and reduce to the bearest minimum fraud in the system.
Implementation of the 10 years capital market master plan and inauguration.
SEC also commenced the revival of the National Investor Protection Fund as part of effort to boost investor confidence in the year under review. NIPF concluded a rigorous verification of investors’ claims against Mega Asset Managers Limited and recommended approval of appropriate compensation to the affected investors.
Generally, some financial experts had also expressed their opinions about the outgone year.
The Managing Director, Flexus Solution Investment Limited, Mr Kounougna Henri said CBN should relax some of the monetary policies especially the limit put on spending and devaluation of naira which is not helping the performance of the local currency .
“When too much protocol is put on business policies, it scares investors and makes them move to alternative markets in other countries,” he said.
Chairman, Association of Issuing Houses of Nigeria (AIHN), Mr Victor Ogiemwonyi urged CBN to strive towards the reduction of the Monetary Policy Rate (MPR) to stimulate activities in the bond market.
He said that government’s borrowing rate in the capital market should drop to avoid crowding out of funds and to make the market attractive for private sector to raise funds.
To the Head, research and investment advisory at Meristem, Mr. Basheer Bashir, the current market situation provides attractive buying opportunities for discerning investors.
However, the uncertainty and instability that challenged the capital market in 2015 should not be the final judgement for the market which has the capacity to experience growth pending the ability of stakeholders in the Nigerian economy to relax the policies that have negatively affected the capital market and investors.
Lilian Peters
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter