Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange, has said that capital market has lost in total of $30billion (or N5.910 trillion in naira terms) following dwindling global oil prices.
Onyema disclosed this on Thursday while addressing journalists and market observers at the 2015 market performance and 2016 outlook in Lagos.
He explained that the nation’s capital market does not operate in isolation as 60 per cent foreign investors dominate the market.
Global Oil prices have tumbled to $25.76 a barrel on Tuesday as a result of rising US energy stockpiles and China’s weakening currency.
For US oil, that was its lowest point since touching $32.40 in December 2008 during the global financial crisis.
Huge profit-taking has continued to drag the equities market, which is now below 25,000.00 basis points as at January 13, 2016.
Most listed multinational companies and banks share that rely heavily on oil revenues have been suffering as a result.
Speaking further, the NSE boss confirmed that the flagship index of All Share Index declined by 17.4 percent in 2015, closing the year at 28,642 points after starting the year relatively flat.
The decline, Onyema disclosed was due to a combination of aforementioned factors including political risk, currency volatility, and uncertainty in global crude oil prices.
Furthermore, Onyema added that the Banking Index was the worst hit during the year under review, plunging by 23.6 percent, followed closely by the NSE 30 Index and NSE Main Board Index, (both down 17.6 percent); all the NSE market indices performed poorly, relative to their 2014 performance, except for NSE Industrial Index which saw an uptick of 1.3 percent.
According to him: “The market for new equity listings was flat for the year, with only four new equity listings, one on the Main Board, and three Equity Traded Funds (ETFs). In contrast, five companies were delisted in 2015, bringing the number of listed companies and number of listed equities to 184 and 190, respectively.
Turnover velocity declined through 2015 by 17.0 per cent, with equity turnover declining by 28.8 percent to N952.8 billion ($4.8 billion), and a foreign and local participation rate of 54.24 percent and 45.76 percent, respectively, in total value traded. Average daily turnover was also down 28.5 percent.
In the NSE bond market, the Market Capitalization jumped by 32.7 per cent to N7.14 trillion ($35.82 billion) as corporates took to the debt market to raise a total of N112.0 billion ($562.0 million) in seven new listings; majority from financial services sector. The Federal and State Governments raised N76.5 billion ($383.7 million) and N35.8 billion ($179.6 million) in debt capital, respectively”, he concluded.
While speaking on strategy adopted in 2015 to manage activities for the period, Onyema explained that throughout the year, the Exchange focused its priorities on restoring and upholding investors’ confidence in light of the headwinds facing the African marketplace. “Except for one, all the African stock exchanges were negative in USD terms for 2015. Despite the downward trend in the stock market, the NSE still recorded several positive milestones in executing its strategy.”