News Column

Stock Market Soars By N13.4 Trillion in 15 Years Under Civilian Government

June 1, 2014

Goddy Egene

The return to civilian rule in 1999 boosted the growth of the Nigerian stock market as its capitalisation soared by N13.473 trillion during the last 15 years of democracy, THISDAY checks have revealed.

After years of military rule, Nigerian transited to civilian government on May 29, 1999, when Olusegun Obasanjo assumed office as a civilian president. And by May 29, last week, the country has witnessed 15 years of uninterrupted democracy.

THISDAY checks on the performance of the stock market during these 15 years showed that the market soar by 6,068 per cent or N13.473 trillion from N222 billion on May 1999 to N13.695 trillion May 30, 2014.

Similarly, the Nigerian Stock Exchange (NSE) All-Share Index rose from 4,919.51 in 1999 to close at 41,474.40 last week, showing a growth of 743 per cent.

Market operators said the entrenchment of democracy brought stability in formulation of economic policies that attracted many companies and investments to the stock market.

They also added that the innovations brought by the current management led by Oscar Onyema, who took over in 2011 have made the market more attractive to companies and investors.

Within three years of Onyema's assumption of office, the Nigerian equities appreciated by N4.531 trillion. Onyema assumed office in April 2011 and by April 2014, the market grew by N4.531 trillion, while the NSE All-Share Index grew by about 57 per cent.

Operators had attributed the growth to the innovative growth strategies introduced in the market by the NSE management.

When he assumed office in 2011, Onyema promised that the focus of its management team would the deepening the stock market, integrity, transparency, discipline, adherence to corporate governance principles, amongst others. The management then went ahead to introduce what it called the "five pillars" of its transformation strategy including: targeted business development, enhanced regulatory programmes, 21st century technology strategies, enhanced market structure, and investor protection initiatives.

The NSE introduced a new market structure that reclassified the sectors for better understanding, new products exchange traded funds) and new trading platform(X-Gen). However, market operators said the major initiative that boosted the performance was the introduction of market making that eventually led to an increase in the daily price movement from five per cent to 10 per cent.

Onyema had said that this year the NSE would concentrate on achieving global visibility in 2014 having recorded some milestone in the effort of restructuring and improving technology development in the last three years.

"While the NSE's focus from 2011 to 2013 has been on restructuring, improving technology, product development, and advocacy for changes to policy, in 2014, we will shift gear to drive innovations centred on increasing global visibility into the Nigerian capital market, developing a larger footprint on the continent, and ultimately, targeting emerging market status." According to him, the Exchange's primary focus will be on growing the capital market in preparation for achieving emerging market status in 2914.

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Source: AllAfrica

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