The Nigerian Stock Exchange (NSE) yesterday, said the Federal Government raised about N1.16 trillion from the capital market to finance fiscal and infrastructural deficits in 2018.
Chief Executive Officer, Oscar Onyema, who disclosed this to newsmen during the NSE’s 2018 market recap/2019 outlook in Lagos, said the funds were raised through various bonds including Green Bond, Sukuk Bond and Savings Bond, adding that the government listed bonds worth N1.16 trillion during the period, alongside Eurobonds totaling $3.36 billion.
He said, “Projections of heavy government borrowings to finance the planned infrastructure were validated as Federal Government listed N1.16 trillion in 2018. Thus the capital raising was dominated by the Federal Government having accounted for 79.30 percent of bond issuance during the period to finance fiscal and infrastructure deficits.”
Reviewing the performance of the market in 2018, Onyema said that the NSE’s fixed income increased by 11.75 percent to N10.17 trillion from N9.10 trillion in 2017, while the turnover also increased by 22.34 percent, compared with 2017 driven by a search for an alternative asset class as opposed to equities.
According to Onyema, capital raising by corporate entities declined by 39.09 percent, with a total of N31. 47 billion raised in 2018, while the market also witnessed 50.53 percent increase in foreign outflows during the period from N402.26 billion in 2017 to N605.54 billion in 2018.
He attributed the trend to attenuated foreign participation due to shift to higher yielding assets with lower risks in developed countries, coupled with the impending political risks in the coming elections.
Onyema said the NSE market capitalisation in 2018 dropped by 14 percent to close at N13.61 trillion against N11.73 trillion achieved in 2017.
On investor participation, the NSE boss said foreign investors accounted for 50.87 percent participation in 2018, while domestic investors accounted for 49.13 percent.
Also commenting on market outlook for 2019, Onyema noted that investor sentiments in the first half of the year will be driven largely by uncertainty in oil prices as well as the 2019 general elections.
His words, “Accordingly, we anticipate volatility in equities markets in the first half of 2019, with enhanced stability post-elections. We believe swift approval and implementation of the 2019 budget will have a positive impact on companies’ earnings as well as consumer spending. Therefore, we expect an uptick in market activity during the second half of 2019.
“To enhance our listing prospects, we have strengthened our government engagement efforts on privatisation and listing of state owned enterprises, and we expect to take advantage of opportunities within this space during the year.”
Onyema thereafter said that the Exchange intends to maintain its 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.