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8/7/2019 NSE review of 2010 and outlok for 2011
1/41
Review of Market Performance in 2010and
the Outlook for 2011
Presented by
Emmanuel Ikazoboh
Interim Administrator, The Nigerian Stock Exchange
forThe Nigerian Stock Exchange Annual Review
Stock Exchange House, Lagos
10 January 2011 1The Nigerian Stock Exchange
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Economic Review
2010 Market Review
2011 Outlook
2011 Focus CSCS Review
Questions & Answers
Welcome
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GDP growth averaged 7.6%* Oil contributed 84% of GDP
Other major contributors: Agriculture, Wholesale/RetailTrade, Telecommunications
Government revenue was N5,297.18 billion
11% below budget requirement
Crude oil receipts accounted for 74.5%
Revenue gap bridged by local borrowing and ECA
withdrawals Balance of ECA at year end was $300 million
2010 Economic Review: Q1-Q3
10 January 2011 The Nigerian Stock Exchange 3
*At the end of Q3 2010. Expected 8.29% growth in Q4 would produce an average GDP of 7.8% for 2010.
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CBN-driven solutions to economic growth challenges Continued banking reforms to foster financial stability
Strategic management of the Naira and foreign exchange
Small & Medium Enterprises Credit Guarantee Scheme
(SMECGS) to avail credit to manufacturers and SMEs
Power & Aviation Intervention Fund (PAIF) to stimulateprivate sector investment
AMCON commenced operations in Nov 2010
Approved the purchase of all margin loans in the bankingsector estimated at N2.2 trillion
N1.04 trillion non-performing loans purchased in Dec 2010
2010 Economic Review
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National total public debt at $32.5 billion in Sep 2010 16.8% of GDP
$4.5 billion external debt and $28 billion internal debts
Debt-to-GDP ratio approximately 17 (global limit set at 40)
Inflation at 12.8% in Nov 2010
11-month average of 13.9%
MPR increased in Sep 2010 to curb inflation (6% to 6.25%) NIBOR averaged 8.62%
2010 Economic Review
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Country financial ratings Standard & Poor: B+ long-term rating with stable outlook
Standard & Poor: B short-term foreign and local currencysovereign credit rating with stable outlook
Fitch: BB sovereign credit rating with negative outlook
Contributory pension scheme
4.3 million workers registered with PFAs by Jul 2010
N1.8 trillion in assets accumulated by Aug 2010
Revised investment guidelines released in Dec 2010 Allowing investment in specific infrastructure funds and debt
instruments
2010 Economic Review
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Review of Market Performance in 2010
and the Outlook for 2011
2010 Market Review
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Harsh operating environment Mixed performance by listed companies
Declining income and savings
Rise in unemployment and weaker purchasing power
Inflationary pressure
Lack of investor confidence
Margin loan overhang
Absence of margin facilities Bank withholdings of equity acquisitions by investors
Reduction of bank exposure to margin loans
2010 Market Review: Overview
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Q1: Bullish market emerged Reduction in deposit interest rates
Q2: Bearish market emerged
Allegations/counter-allegations between council/executives
Q3: Bearish market persisted
SEC intervened in the NSE
Q4: Bullish market re-emerged
SEC investigative report of the NSE leaked AMCON commenced operations
Extension of trading hoursby 2 hours
2010 Market Review: By Quarter
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10 January 2011 The Nigerian Stock Exchange 10
2010
93.33b Shares
N797.55b Value
3.2% of GDP
9.25%
16.3%
2010 Market At-a-Glance
2009
102.85b Shares
N685.72b Value
2.9% of GDP
9.25%
71.43%
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Federal Bonds, 0
Ordinary Shares (All),
93,335,000,000
Preference Shares, 0
State Bonds, 13,000Corporate Bonds, 0Volume
2010 Market Review: Activity
13 December, 2010 The Nigerian Stock Exchange 11
2009 AVG. DAILY ACTIVITY
414.73m shares worth N2.8b
2010 AVG. DAILY ACTIVITY
377m shares worth N3.2b
Meanwhile
13.8b units valued at
N15.34t traded in
the OTC market
(N14.1m)
(N797.55b)
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Company Volume Traded(Billion Shares)
% of TotalVolumeTraded
Zenith Bank Plc 6.302 6.8
First Bank of Nigeria Plc 5.442 5.8
Guaranty Trust Bank Plc 4.291 4.6
United Bank for Africa Plc 4.253 4.6
Access Bank Plc 3.456 3.7
FinBank Plc 3.200 3.4
Skye Bank Plc 2.979 3.2
Fidelity Bank Plc 2.952 3.2
Diamond Bank Plc 2.778 3.0
Oceanic Bank International Plc 2.049 2.2
20 Most Active Stocks in 2010
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Company Volume Traded(Billion Shares)
% of TotalVolumeTraded
Bank PHB Plc 1.819 2.0
First City Monument Bank Plc 1.748 1.9
Transnational Corporation of Nig. Plc 1.693 1.8
Union Bank of Nigeria Plc 1.544 1.7
AIICO Insurance Plc 1.540 1.7
Japaul Oil & Maritime Services Plc 1.524 1.6
Guaranty Trust Assurance Plc 1.427 1.5
Sterling Bank Plc 1.391 1.5
Capital Oil Plc 1.353 1.5
Starcomms Plc 1.099 1.2
20 Most Active Stocks contd.
10 January 2011 The Nigerian Stock Exchange 14
Conglomerates
Insurance
Maritime
ICT
ASEM
Banking
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Securities 264 securities with market cap of N9.92 trillion
Increase of 41.12% New listings (equities and government bonds)
Price appreciation of equities
Equities
217 equities with market cap of N7.92 trillion
Increases: 17 sub-sectors between 3.9% and 622.05%
Decreases: 16 sub-sectors between 2.8% and 48% 20 most capitalised companies have market cap of N6.15t
62% of total securities market cap or 78% of equities market cap
2010 Market Capitalisation
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2010 Market Capitalisation
10 January 2011 The Nigerian Stock Exchange 17
-
50
100
150
200
250
300
350
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10
NumberListed
Equities
Listed Equities & Market Cap
Market Cap. (Millions) Listed Equities
217 equities
N7.92tr
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Government Bonds 40 listed securities with market cap of N1.94 trillion
4.33% decrease from December 2009
Corporate Debt
7 listed securities with market cap of N56.4 billion
600.4% increase from December 2009
2010 Market Capitalisation
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cc
2010 Review: New Issues contd.
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15 securities delisted 12 fixed income securities due to maturity
3 companies
12 companies in the final stage of delisting
7 companies from the Main Board
5 companies from ASEM
2010 Market Review: Delistings
10 January 2011 The Nigerian Stock Exchange 22
2010 M k t R i P iti
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Extension of trading hours Results in a one month period
5% increase in number of deals
15.6% increase in volume traded
24.8% increase in value traded
2010 Market Review: PositiveStrides
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-
10,000,000,000.00
20,000,000,000.00
30,000,000,000.00
40,000,000,000.00
50,000,000,000.00
60,000,000,000.00
70,000,000,000.00
BEFORE EXTENSION
(06/11/10 -
05/12/10)
AFTER EXTENSION
(06/12/10 -
06/01/11)
54,444,012,50
5.88
67,947,542,83
6.45
VALUE
Extension of Trading Hours
10 January 2011 The Nigerian Stock Exchange 24
5,800,000,000
6,000,000,000
6,200,000,000
6,400,000,000
6,600,000,000
6,800,000,000
7,000,000,000
7,200,000,000
7,400,000,000
7,600,000,000
BEFORE EXTENSION
(06/11/10 - 05/12/10) AFTER EXTENSION
(06/12/10 - 06/01/11)
6,458,848,071
7,463,207,094
VOLUME
2010 M k t R i P iti
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Trading platform selection Establishment of the Index Committee
Strict enforcement of rules and regulations
Suspension of 74 dealing member firms for failure tosubmit audited accounts
42 companies placed on technical suspension forinfractions of listing rules (17 no longer on suspension)
15 companies placed on full suspension for violation of
listing rules 7 companies recommended for delisting
2010 Market Review: PositiveStrides contd.
10 January 2011 The Nigerian Stock Exchange 25
2010 Market Re ie Dealing
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242 dealing member firm inspections completed Resolution of 135 complaints out of 366 (291 against
active dealing member firms)
8 out of 9 new firms approved to begin trading
6 firms approved to operate new branch offices
2010 Market Review: DealingMembers
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Review of Market Performance in 2010
and the Outlook for 2011
2011 Outlook
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Drivers of economic growth in the medium term Non-oil sector
Investments in critical infrastructure
Continued focus on promoting macroeconomic stability
Oil sector Increase in local refining capacity
Reduction in importation
Reduction in government subsidy expenditure
2011 Outlook: Growth
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Drivers of economic growth in the medium term Capital market
Supporting government agencies sourcing of funds
Improved asset valuation with AMCONs purchase of NPLs
Recapitalisation as a result of bank M&As Supporting manufacturing companies strengthening of capital bases
2011 Outlook: Growth contd.
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Government borrowing from the public (bonds) Could crowd out the private sector
Inflation, as a result of:
64% increase in minimum wage to N18,000
Rising government borrowing
Expected increase in political spending
Releases from the ECA
Huge fiscal injections by AMCON
Multi-taxation of businesses and investors
Non-acutalisation of the privatisation scheme
2011 Outlook: Growth Risks
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Operate an efficientand transparentbusiness that iscommitted to disciplineand integrity
Facilitate a seamless transition to a new CEO
Maintain a zero-tolerance policy
Broaden and deepen the market
Increase investor confidence
2011 Objectives
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1. Enforcement2. Investor protection & education initiatives
3. Market development
4. Capacity building of market participants
5. Product development
6. Transition to CEO
7. Strategic alliances
2011 Outlook: NSE Focus
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3. Market Development Full dematerialization
Introduction of market makers
Development of retail arm of the bond market
Official launch of the ASEM/PRIPEX market Upgrade of the trading platform
4. Capacity Building of Market Participants
Training and education
Product development
2011 Outlook: NSE Focus contd.
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5. Product Development New products
Exchange Traded Funds (ETFs)
Shariah compliant products
Information and data products
Government sovereign bonds*
Existing products Real Estate Investment Trusts (REITs)
Debentures and bonds
2011 Outlook: NSE Focus contd.
10 January 2011 The Nigerian Stock Exchange 36
*DMO and CBN products. Benefits of trading on the exchange include increased FGN revenue potential, aswell as complete transparency.
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6. Transition to CEO Follow through on multi-stage executive recruitment
process, including SEC approval component
Meet the Apr 2011 deadlline
7. Strategic Alliances Mutual understanding with the JSE
Affiliations with global trade organisations, e.g., WorldFederation of Exchanges, IOSCO, etc.
Mutual cooperation with regional exchanges through ASEA
2011 Outlook: NSE Focus contd.
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Review of Market Performance in 2010
and the Outlook for 2011
CSCS Review
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2010 Market Review: CSCS
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Shareholders 4.5 million shareholders in the CSCS system
62 shareholder requests for share certificates (down 43.1%from 2009)
437 shareholders used holdings in CSCS depository ascollateral for loan facilities (down 71.8% from 2009)
886,124 share certificates dematerialised
Trade Guaranty Fund at N52 million
2010 Market Review: CSCSReport
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Review of Market Performance in 2010
and the Outlook for 2011
Q&A Session
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