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How local investors dominate N1.03trn share deals in 2020 – Onyema

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NGX Group reassures market dominance after N6.78bn earnings in 2021

How local investors stimulate N1.03trn share deals in 2020 – Onyema


 

Oscar Onyema, the chief executive officer of the Nigerian Stock Exchange (NSE) has given details of how the local bourse benefited from dominant participation of local investors in 2020.

Delivering his presentation at the NSE’s annual 2020 Market Recap and 2021 Outlook on Tuesday, Onyema noted that while transaction value in the market surged to N1,03 trillion in the year under review, local investors were responsible for most of the share deal, outperforming their foreign counterpart.

“Noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (Retail: 44.98 per cent; Institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent,” he said.

Onyema recalled that the Nigerian equities market got off to a strong start in 2020, returning 10.4 per cent by the eighth trading session.

“By October, the equities market entered a much awaited bull run. Buoyed by the formal declaration of the U.S president-elect, unattractive fixed income yields, and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of -14.90 per cent recorded in 2019.

“During its remarkable year-end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility,” he added.

At the close of the year, the NSE’s equity market capitalization was up by 62.42 per cent, from N12.97 trillion in 2019 to N21.06 trillion in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96 trillion in 2019 to N1.03 trillion in 2020.

He further added that the year 2020 was indeed a historic one for global capital markets. Facing buffeting headwinds, world markets saw sharp swings and steep losses but largely remained resilient and orderly amid rising uncertainty

For Nigerian bourse, he said renewed investor optimism coupled with improved economic conditions and low fixed income yields propelled the year-end bull run.

He explained: “Of 93 global equity indices tracked by Bloomberg, the NSE All-Share Index (ASI) emerged as the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent), and other global and African market indexes, to post a one-year return of +50.03 per cent.”

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