Exchange expects more government, corporate capital in domestic market

The Nigerian Stock Exchange (NSE), anticipates improved activities in the primary market, saying the Exchange would record increased inclinations from governments and corporates to raise capital in the domestic market.

The primary segment of the capital market is the market for fresh issue of securities by companies that need funds for business expansion or governments who require funds for infrastructure. Companies or governments that issue securities are called issuers.

The Chief Executive Officer, the NSE, Oscar N. Onyema, said this during the African Stock Exchanges panel session at the Brand Africa 100 Launch in commemoration of Africa Day 2020, organised by IC Events, Brand Leadership and Africa Practice on Monday.

He said: “As corporations all over the world battle the impacts of the COVID-19, the support of securities exchanges for capital market ecosystems has become even more relevant in building sustainable businesses and stimulating growth across Africa.
“On the part of the issuers, while there continues to be activity in the primary market, we foresee an increased inclination from governments and corporates to raise capital in the domestic market, particularly through bonds and secondary market issuances.”

Onyema, who spoke alongside the CEO, Johannesburg Stock Exchange, Dr. Leila Fourie, and CEO, Nairobi Securities Exchange, Geoffery Odundo, deliberated on the impacts of COVID-19 on their respective economies.

The panellists expressed similar experiences in terms of volatility of the market, future expectations of issuers, and the critical need for partnerships across Africa to boost productivity and project the continent’s best brands.
Speaking to the impact of COVID-19 on Nigeria’s capital market ecosystem, Onyema said: “Since we transitioned to seamless remote trading and working in response to COVID-19, we have seen a lot of activity across diverse asset classes.

“Investors have enjoyed dividend payouts in double digits in the equities market; attained relative safety in the fixed income market; and are reaping strong returns in alternative asset classes like the Newgold ETF.”

NSE had recently committed the sum of N100million to support the fight against the Coronavirus (COVID-19) pandemic in Nigeria, with N60million going to the Capital Market Support Committee for COVID-19 (CMSCC), while the balance of N40million will be donated to the ‘Masks For All Nigerians’ campaign.

The CMSCC is a Securities and Exchange Commission (SEC-led) committee, comprised of the capital market community to galvanise the market ecosystem to play an active role in curbing the spread of COVID-19 in Nigeria.

The Exchange said: “In addition to its efforts as part of CMSCC, the ‘Masks For All Nigerians’ campaign will see the NSE donate over 100,000 reusable face masks to states most affected by COVID-19. “In addition, The Exchange will run an enlightenment programme on the safe use of masks on traditional and social media.”
Furthermore, the NSE said the campaign follows growing call for the use of masks as an effective measure in curtailing the spread of COVID-19.

“With the increasing body of evidence that the use of masks by the populace could slow the spread of coronavirus, several countries, including the United States of America, Austria, Slovakia, Czech Republic, Canada, and Nigeria to name a few, have adopted this control measure.”

Onyema said, “At the Exchange, we recognise the health and economic impact of the COVID-19 pandemic on Nigerians and the need to adopt more proactive steps in stemming the tide. In line with our tradition of supporting the communities where we operate, we have launched the Masks For All Nigerians campaign to ensure that protective masks get into the hands of citizens in the more vulnerable places.”

“Through our media enlightenment engagement, we will raise awareness on the proper use of masks, continue to encourage adherence to the guidelines that have been provided by relevant agencies and emphasize that wearing of masks alone is not enough protective measure against COVID-19.

“We have also been deliberate with this intervention by patronising local manufacturers in our efforts to support indigenous businesses, who we have mandated to comply with the mask production specifications provided by the Standards Organisation of Nigeria (SON), and the National Agency for Food and Drug Administration and Control (NAFDAC),” he added.

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