The Nigerian Capital Market can Finance 2016 Budget Deficit- Oscar Onyema

Chief Executive Officer of the Nigerian Stock Exchange, Mr. Oscar Onyema, has affirmed the ability of the capital market to finance the federal government’s proposed budget deficit for 2016. Speaking at the NSE 2015 Market Recap and Outlook for 2016 yesterday in Lagos, Onyema said with greater clarity on policy direction, the exchange anticipates the return of investors who had remained on the sidelines throughout 2015.

He stated that the return of investors is predicated upon return of their (investors)  confidence as a result of effective implementation and communication of the government’s economic blueprint; credibility in monetary policy stance; relative stability in the macro economy (oil price stability above benchmark targets), increase in tax collection to GDP ratio and improved security, among others.

The NSE will focus on executing its strategy in order to continue to provide a credible platform for financing the economy.
To this end, we intend to intensify engagement efforts with the FGN.

We have also prioritised three initiatives for 2016 aimed at achieving the exchange’s three strategic objectives of increasing the number of new listings across five asset classes; increasing order flow in the five asset classes; and operating a fair and orderly market based on just and equitable principles,” he said.

Onyema noted that the exchange will continue to dialogue with the FGN to ensure that state-owned enterprises are listed in the capital market to unlock the government potentials.

He said the recent pronunciation by the Minister of State for Petroleum, Mr. Ibe Kachukwu, that NNPC is looking at raising Initial Public Offer (IPO) is encouraging.  Onyema disclosed that the stock market lost about $30 billion in market capitalisation  from 2014 to date due to the fall in oil price.

He said the downturn from 2015, has already continued into the new year. “Accordingly, we anticipate 2016 to be a challenging year for the capital market and the domestic economy. “We intend to continue our collaborative efforts with the new administration and other private sector players to create a framework for financing the nation’s infrastructure and capital requirements.

Additionally, we plan to work with the FGN to ensure that the appropriate message is conveyed to the investor community. “The current state of the market creates both challenges and opportunities for investors. We believe that taking a portfolio approach to investing provides the best risk adjusted alternative for participating in the capital market.

As such, we want to ensure that the NSE provides a repertoire of products that will allow investors to create well diversified portfolios of uncorrelated asset classes,” he said.

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