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The Nigerian Stock Exchange (NSE) has said that bearish market sentiments in the first half of the year will continue to be driven by uncertainty in oil prices as well as the 2019 general elections.
Speaking to newsmen during the NSE 2018 Market Recap/2019 Outlook in Lagos last week, Chief Executive Officer, NSE, Oscar Onyema, said that the Nigerian economy continued a path of recovery, growing by 1.81 per cent year on year in real terms as at the third quarter of 2018.
Reviewing the performance of the market in 2018, Onyema said that the NSE equity market started the year on a high, with the All Share Index (ASI) reaching a ten-year peak of 45,092.83 points in January. According to him, this was largely driven by the positive performance of the ASI in 2017 which emerged the best performing market in Africa.
He noted that it was during the second quarter, political risks, oil price volatility and rising global yields resulted in bearish sentiments that saw the ASI and equity market capitalization fall by 17.81 and 13.87 per cent to close at 31,430.50 and N11.73trillion respectively.
“In the year under review, foreign portfolio investments outpaced domestic participation by 1.73 per cent, accounting for 50.87 per cent of total transactions, while domestic transactions accounted for 49.13 per cent. Within Domestic Institutional order flow was 56 per cent, retail order flow was 44 per cent, while fixed income market capitalization increased by 11.75 per cent to N10.17 trillion in 2018 from N9.10 trillion in 2017”
On the outlook for 2019, Onyema noted that the market sentiments in the first half of the year will be driven by uncertainty in oil prices as well as the 2019 general elections.
His words, “We anticipate volatility in equities market in the first half of 2019, with enhanced stability post elections. We believe that swift approval and implementation of the 2019 budget may have a positive impact on companies’ earnings as well as consumer spending. Therefore we expect a return of primary market activity with an uptick in secondary market activity during the second half of 2019.
“The NSE will continue to execute our 2018-20121 strategy, working more closely with our stakeholders particularly the market intermediaries to bring onboard new financial instruments and maximize organizational bond.”
The NSE boss thereafter said that it intends to maintain collaborative efforts with public and private sector stakeholders to advocate for market friendly policies, and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth.
