Happenings in the Nigerian political space and possible foreign exchange fluctuations are expected to impact the stance of the country’s capital market in 2018, albeit for a short period, the Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, has said.

Onyema, however, described the overall outlook of the market for the year as “encouraging”.

The NSE boss said this at the 2017 Market Recap and Outlook for 2018 event at the Stock Exchange House, Lagos, on Tuesday.

The annual event is a forum for the chief executive of the NSE to brief the stockbroking community, analysts, media and other stakeholders, on the performance of the market in the preceding year and give prognosis for the market for the New Year.

In keeping with its objective of taking a vigorous and adaptive approach to strategy execution, Onyema stated that NSE re-assessed its strategic agenda in the light of changing dynamics in both the operating environment and the global exchange landscape against the backdrop of the fourth industrial revolution.

This, according to him, has culminated in a new corporate strategy for the 2018–2021 period.

He said, “Our efforts will be geared at satisfying our customers, boosting our domestic retail segment, and enhancing our organisation for a demutualised structure.”

In his presentation, Onyema noted that the NSE recovered from the macroeconomic overhang of the commodity downcycle to become the third best performing market in 2017 globally, with a 42 per cent return in the NSE All-Share Index; while attributing the performance, in part, to the Central Bank of Nigeria’s monetary policies that resulted in increased liquidity in the foreign exchange market.

Speaking on the forecast for 2018, Onyema said, “Indeed, to some extent, political activities and currency movements will have some effect on the market, but we expect that such impacts will be short lived and the performance of the underlying business activities will ultimately determine market performance.”

He said the NSE was on track to become a more agile and flexible demutualised securities exchange, adding that, “We are hopeful that the Demutualisation Bill will be signed into law in 2018, and are working assiduously with our advisers to fine-tune outstanding aspects of the demutualisation project as well as providing clarity and transparency on the process via regular engagement with all our valued stakeholders.

“In 2018, the NSE will launch Exchange Traded Derivative instruments and continue to engage with the government on the privatisation and listing of state-owned enterprises in collaboration with the private sector. We also plan to maintain our role as an advocate for the adoption and implementation of market-friendly policies.”

According to Onyema, the equity market activity skyrocketed from 2016 levels, as market turnover increased by 121 per cent to N1.27tn from N0.58tn, adding that, “the IPO activity in the year remained mute, however, there were several other positive indicators including the revival of supplementary listings and the return of new issuances. The value of supplementary listings increased by 27 per cent, bringing the total value of equity issues in 2017 to N408bn.”

On bonds, he said the NSE fixed income market recorded mixed performance, adding that, “New bond issuances increased over the previous year, while bond yields gradually moderated from 2016 levels amidst easing inflation and greater forex stability.

“Yields across various tenors declined between 0.4 per cent and 1.5 per cent, and market turnover declined by 24 per cent in 2017, as investors sought higher returns in alternative product classes. However, supplementary issuances by the Federal Government saw bond market capitalisation increase by 34 per cent year-on-year.

“The NSE’s ETF market witnessed increased activity across key metrics in 2017, recording a 272 per cent year-on-year growth in trade volumes, 33 per cent growth in turnover and a 40 per cent year-on-year increase in market capitalisation to close the year at N6.69bn.”

He said, the NSE made steady progress on its strategic focus areas set out at the beginning of 2017.