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By Chinwendu Obienyi
When the COVID-19 pandemic blew an evil wind across the world, it left in its trail a devastating impact on global economic activities even as the lockdowns curtailed its spread signiicantly.
Nigeria was not an exception as the Federal Government in April 2020, imposed a lock-down in Lagos, Federal Capital Territory (FCT), Abuja and Ogun State even as other states joined.
It suffices to say that while the pandemic had its negative impact on the global economy, the crisis greatly highlighted the importance of having a digital strategy as a company. Those that lacked it prior to the crisis were left suffering from disruptions while organisations with digital agenda able to effectively conduct business during the disaster.
Part of the latter group is the Nigerian Stock Exchange (NSE), which kept operations very much alive with the steady and consistent capacity building in technology, automation as well as digitisation.
In a bid to curtail the spread of the virus and in line with its robust business continuity management framework, the exchange on March 25, 2020, made the bold move to activate its business continuity plan which saw the transition to remote trading.
The Chief Executive Officer of NSE, Mr. Oscar Onyema had said the exchange would close all its trading floors temporarily for 30 days adding that remote trading would then be adopted while staff would be available through all digital platforms to provide support.
“Over three weeks ago, we activated precautionary health measures across our offices where we screened visitors with thermometers, provided sanitisers and minimised access into our premises. We have activated a 30-day remote working plan for our employees excluding essential staff.
All our trading floors will be temporarily closed, although remote trading will continue and NSE staff will be available through all our digital platforms to provide support. We regret any inconvenience this may cause in the discharge of your business activities, but we must act in the best interest of all stakeholders at this time,” Onyema said.
Exactly 365 days later, the NSE continues to maintain seamless trading and business operations recording no down time, and delivering exceptional value to stakeholders. It is no secret that trading activities continued during normal hours, through the provisions of remote trading access via X-NET, FIX Protocol and Virtual Private Network despite restricted access to The NSE’s facilities.
The Exchange also successfully transitioned many of its physical engagements to digital events including the flagship Closing Gong Ceremony, Facts Behind the Figures series, capacity building sessions, stakeholder engagement sessions and more.
The technological transformation by the NSE made the stock market to operate remotely and recover over N552 billion despite the lockdown.
Impressive market performance
The exchange continued to display remarkable resilience in providing stakeholders with a platform to raise capital and invest. In 2020, the market capitalisation of all securities listed on the exchange increased to N38.5 trillion representing a 49 per cent increase from 2019.
For the equities market, the NSE All Share Index delivered a return of 50 per cent closing the year as the best performing stock exchange in the world according to Bloomberg. The Exchange Traded Funds (ETF) market also experienced its best year yet with a 272.30 per cent increase in market capitalisation; and the bond market capitalisation rose by 35.52 per cent. In addition, over N4.03 trillion was raised on the NSE in 2020 and over N722 billion has been raised already in 2021 by governments and corporates across asset classes.
The Demutualisation of NSE
The NSE made giant strides in its aspiration to demutualise in the past year of working from home and remote trading. Following regulatory approvals from the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC), the exchange announced its demutualisation earlier this month and have now embarked on its transition as Nigerian Exchange Group Plc to the ‘NGX’ era.
Conclusion
Ultimately, the NSE made significant progress in building a digital ecosystem that is serving stakeholders excellently in these unprecedented times. Without the foresight of management and the dogged implementation of many of its initiatives, the Nigerian capital market would have suffered major disruptions with local and global stakeholders incurring major losses. Rather, the market continues to enjoy seamless operations with continuous trading, frequent stakeholder engagement, market deepening activities, and all other functions fully activated.
