The Nigerian Stock Exchange on Monday said the Federal Government raised N1.16 trillion from the nation’s bourse in 2018 to finance fiscal and infrastructure deficits.
Oscar Onyema, NSE Chief Executive Officer, disclosed this at NSE’s 2018 market recap/2019 outlook in Lagos.
Onyema said the funds were raised through various bonds such also Green Bonds, Sukuk Bond and Savings Bonds.
Onyema said the government listed bonds worth N1.16 trillion during the period, alongside Eurobonds totalling 3.36 billion dollars to finance various infrastructure projects.
He said: “Projections of heavy government borrowings to finance the planned infrastructure spend validated as Federal government listed N1.16 trillion in 2018.”
Onyema said the capital raising was dominated by the federal government having accounted for 79.30 per cent of bond issuances during the period to finance fiscal and infrastructure deficits.
Consequently, he said NSE’s fixed income increased by 11.75 per cent to N10.17 trillion from N9.10 trillion in 2017.
He stated that turnover also increased by 22.34 per cent compared with 2017 driven by a search for an alternative asset class opposed to equities.
According to him, capital raising by corporates declined by 39.09 per cent with a total of N31. 47 billion raised in 2018.
Onyema said the market also witnessed 50.53 per cent 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 per cent to close at N13.61 trillion against N11.73 trillion achieved in 2017.
On investor participation, Onyema said foreign investors accounted for 50.87 per cent participation in 2018, while domestic investors accounted for 49.13 per cent.
He said the exchange would continue to leverage existing technologies to boost domestic participation in the equities market.
Onyema said NSE was committed to making retail investors major drivers of the market.
On 2019 outlook, he said market sentiments in the first half of the year would be driven by uncertainty in oil prices as well as the general elections.
He added: “We anticipate volatility in equities markets in first half of 2019, with enhanced stability post-election.”
Onyema said swift approval and implementation of the 2019 budget might have a positive impact on companies’ earnings and consumer spending.
He said: “Therefore, we anticipate a return of listings during the year with an uptick in market activity during the second half of 2019.”
Onyema said the exchange would continue to engage both Federal and state governments as well as corporates to ensure enlistment of more companies on the bourse.