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Chief Executive Officer of the NSE, Oscar Onyema, said on Monday that the Nigerian Stock Exchange's All Share Index (ASI) declined last year by 17.81 percent to 31,430.50 points. The NSE's CEO made this disclosure while briefing the stockbroking community, analysts, the media and other stakeholders on the performance of the market in 2018 and the market outlook for 2019.

He also said market capitalisation also dropped by 13.8 percent to close the year at N11.73 trillion. According to Onyema, the weak performance was due to bearish sentiments caused by political risks, oil price volatility and rising global yields.  

According to the statement released by the NSE, the equity market started the year on a high note with the ASI reaching a ten-year peak of 45,092.83 in January 2018. This was largely driven by the positive performance of the ASI, which emerged as the best in Africa in 2017. The precipitous decline began with the onset of Q2 2018.

In the year under review, Onyema said, “Foreign portfolio investments outpaced domestic participation by 1.73%, accounting for 50.87% of total transactions, while domestic transactions accounted for 49.13%.”

He noted that fixed income market capitalisation increased by 11.75 percent to N10.17 trillion from N9.10 trillion recorded in 2017. The Federal Government dominated capital raising with N1.16 trillion raised in a bid to finance fiscal and infrastructure deficits. State Governments raised N125.59 billion in new debt capital, while corporates raised a total of N31.47 billion. The market also witnessed the listing of a N100 billion FGN Ijarah Sukuk designed to finance critical road infrastructure across the country.

But speaking on the outlook for 2019, Onyema said uncertainty in oil prices as well as the 2019 general election will drive the market sentiments in the first half of the year.

“We anticipate volatility in equities markets (in the) first half of 2019, with enhanced stability post-elections,” said Onyema. “We believe the 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.”

He added that the NSE intends to enhance its listing prospects by strengthening its government engagement efforts on privatization and listing of state-owned enterprises and work with the private sector as well, to catalyse the listing of more companies. The NSE also 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 growth.

Regarding the NSE derivatives initiatives, the CEO of Nigerian bourse said, “Our technology infrastructure has been enhanced to support the trading launch. The rulebook has been created and is currently going through the approval process alongside on-boarding of dealing members.”