NGX weathers global market downturns in 2022, makes strong showing with landmark Listings

The Nigerian Exchange Limited (NGX) made a strong showing with its performance in the year 2022 as it recorded landmark…

The Nigerian Exchange Limited (NGX) made a strong showing with its performance in the year 2022 as it recorded landmark transactions.The Chief Executive Officer of NGX, Mr Temi Popoola, said at the NGX 2022 Market Recap and 2023 Outlook on Wednesday, January 25, 2023 in Lagos that “In 2022, the equities market performance was evidenced by the 19.98% increase in the NGX All-Share Index, which rose from 40270.72 to 51,251.06 and the market capitalisation also closed at a high of N27.92tn, up from N21.06tn the previous year.

“The total turnover of trades in 2022 improved by 27% from N916bn to N1.16tn year-on-year from 2021. Market participation was heavily skewed to the domestic investors. The Fixed Income market saw a slight uptick in turnover to N3.89bn in 2022 from N3.53bn recorded in 2021. This represents a 10.20% YoY increase.

“The Exchange Traded Funds market capitalisation increased from N7.35Bn in 2021 to N8.42Bn in 2022, representing a 14.56% increase in the market capitalisation. Stanbic IBTC ETF 30, which tracks the performance of NGX 30 index was the best performing ETF in 2022, having begun the year at N68.5 and closed at N245, reflective of 257.66% returns. ETF transactions fell from N34.22bn in 2021 to N211.02m in 2022. This represents a 99.38% decline in ETF turnover”.

“Altogether, this signaled a good year for the Exchange despite global macroeconomic headwinds,” Popoola added.

On landmark listings, he said that the yearly performance could be attributed in part to N4.3trn in listings recorded by NGX across Equities and Fixed Income markets. These listings included the raising of N2.54trn of bond listings for the Federal Government of Nigeria, as well as equity listings totalling N1.35trn from companies such as BUA Foods Plc and Geregu Power Plc.

He explained that corporate bond listings also contributed significantly to the Exchange’s performance, with a total of N364.78bn raised through listed instruments such as Dangote Industries Plc’s N177.12bn senior unsecured bonds, Lagos Free Zone Company SPV Plc’s N25bn fixed rate infrastructure bonds and Ardova Plc’s N11.44bn and N13.86bn fixed rate senior unsecured bonds. NGX also listed FGN Multi-Tranche $4bn Eurobonds which further demonstrated its diversity of offerings and its ability to attract a wide range of businesses looking to raise capital.

“The value of these listings displays NGX’s commitment to positioning itself as a premier location for capital raising and formation, as well as its ongoing development efforts in the Nigerian capital market post its demutualisation. The Exchange’s ability to facilitate a wide range of transactions and attract a diverse range of businesses highlights its position as a leader in financial market innovation and progress on the African continent,” he said.

On the 2023 outlook, Popoola said that the NGX would take a flexible approach to strategy execution in 2023, doubling down on its 2022 achievements and expanding on several levers.

“As you know, the NGX Technology Board Listing Rules were approval by the apex regulator, the Securities and Exchange Commission in December 2022. With this, we aim to drive more technology companies to the Exchange and deepen capital formation in the technology sector. Currently we are in consultations with stakeholders in the sector and we are confident of securing a few big names within the year,” he said.

“On strategic partnerships, we will be forging more with development finance institutions, banks, both local and international to further develop the market. We aim to do more on trading where we improve data dissemination to attract a larger investor base, especially from the retail side. We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.

“NGX sees sustainability as not just important but also a profitable frontier of its business and work is ongoing on developing a framework for certifications in carbon credits trading, pending regulatory approval. On the capital market’s digital transformation, the Exchange is working on USSD launch in collaboration with Telcos and Banks; unlocking the African Capital markets via payment integration with Afreximbank’s Pan African Payment Settlement System.”

According to him, the Exchange also sets its sight on the development of new products aimed at attracting the lower rung of the Nigerian demography.

“NGX is also focused on increasing youth participation with the creation of digital asset products powered by Blockchain technology, non-depository receipts and overall increasing the pool of available liquidity in the market. Altogether, 2023 is likely to be a new dawn for the market and the Nigerian economy as significant events take shape in the macroeconomic and political environments,” he added.  ($1=N459)