Leadership (Abuja)

12 December 2012

Nigeria: NSE to Overthrow Egypt, Emerge Best Performing in 2012

The Nigerian stock market would most likely overthrow Egypt's to emerge as best performing stock market in Africa before the end of this year.

Director General of the Securities and Exchange Commission (SEC), Ms Arumma Oteh who expressed this hope yesterday said the country's stock market was currently showing very positive signs in terms of performance, particularly in the wake of the forbearance package announced by the federal government.

"Before the end of the year the Nigerian stock market could take over from Egypt as the best performing stock market. We are right now at 29.4 per cent year to date and Egypt is at 33.3 per cent," she said.

Speaking during at the maiden Annual National Workshop of the Chartered Institute of Stockbrokers (CIS), she said that the stock market was benefiting from the various reforms undertaken in the financial sector especially in the banking sector which have resulted in improved performance by the companies.

"I think that what is even more exciting about the performance of our stock market is that we are seeing the benefit of the hard work of the Central Bank of Nigeria and people are applauding the reforms in the banking sector which has rubbed off on the capital market. We are seeing in the earnings and in the quality of corporate governance of the institutions," she added.

"But it is not just the banking sector that is driving the market. It is the fast moving consumer companies, as well as construction. And we have others in the making. I think when the government finishes the oil and gas sector reforms, when we have upstream oil and gas represented on our stock market, then that sector would begin to pick up. So we are still advocating for petroleum industry bill, that the work that is being done should be fast-tracked," said.

She expressed delight that it was not only foreign investors that were showing interest in the capital market, adding "We started the year with 80 per cent on a daily basis by value of foreign investment in the market but today we have 70 per cent. So I think that the local investors are also starting to see the opportunities."

Oteh described the workshop as very critical in aiding an understanding of the role of the capital market in unlocking the potential of the economy.

"Without medium to long term finance, we won't address the challenges that were having in meeting the transformation agenda," she said.

She noted that it would be very difficult for the federal government to finance the big ticket projects particularly in infrastructure and many other areas with the N4.9 trillion budgetary allocation with all the various competing needs for finances.

The SEC DG also called on big companies like the telecommunications, and oil and gas companies to come and list in the market adding that there are enough investable funds to absorb them.

"I am also very excited that finally we have the Sovereign Wealth Fund set up, we have the management team and $1 billion has been set aside. We have advocated is that the SWF is also invested in the capital market."

She commended the management of the National Pension Commission, not just for setting an example of how to credibly built an industry which has the highest level of corporate governance, but have also shown that they understand the value that the capital market plays in terms of building wealth for pensioners when they retire because this idea that young contributors can invest 50 per cent of their contributions in equities is actually the way to go. So we have N3 trillion from pension and $1 billion on SWF. We also have the Insurance Investable Fund in the making, I think NAICOM is working closely with to ensure that there is mandatory insurance which ensures that there is premium which can be invested in the capital market. This means that on the demand side, we have a number of sizable pool of investable resources," she said.

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