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Nigerian Exchange Limited (NGX or The Exchange) hosted its annual 2021 Market Recap and 2022 Outlook in collaboration with Renaissance Capital (RenCap) today, 03 February 2022. The virtual event facilitated conversations around The Exchange, the larger Nigerian capital market, and the economy as a whole with presentations from the Chief Executive Officer, NGX, Temi Popoola, CFA, and Global Chief Economist/Head of Macro-strategy, RenCap, Charles Robertson; and a fireside chat with the Director-General, Budget Office of the Federation, Ben Akabueze.

 

Delivering his presentation at the event, Mr. Popoola stated, “History was made as The Nigerian Stock Exchange (NSE) completed its demutualisation process, following statutory approvals from the Securities and Exchange Commission and Corporate Affairs Commission (CAC). With demutualisation, NSE transitioned into a non-operating holding company, Nigerian Exchange Group Plc. (NGX Group) with three subsidiaries – Nigerian Exchange Limited (NGX), the operating exchange; NGX Regulation Limited (NGX RegCo), the independent regulatory company; and NGX Real Estate Limited (NGX RelCo), the real estate company. As we walked through 2021, many of the benefits of this transaction were realised making NGX more agile and commercialised in its operations.”

 

 

Key outcomes highlighted during the presentation are as follows:

2021 was a generally positive year for the NGX’s suite of indices as all but three (3) of the indices ended the year with positive returns. NGX’s flagship index, NGX All Share Index returned 6.1% driven by recovering corporate earnings and improved investor sentiments. The Equity Capitalization rose by 5.89% or N1.24Tn during the year. The NGX Oil and Gas Index was the best performing index with a return of 52.52% driven by recovery in the global oil prices and stronger performances from oil and gas companies. This was closely followed by the NGX Growth Board Index which returned 28.0%.

 

In the fixed income market, capitalization grew by 12.81% from N17.50Tn in 2020 to 19.74Tn in 2021 driven majorly by FGN Bond issuances. The year 2021 saw the groundbreaking listing of BUA Cement’s N115Bn Bond, the largest corporate bond. We also saw the listing of LFZC Funding SPV’s N10Bn, the longest dated corporate bond. We also saw significant uptick in the value of turnover in the fixed income as turnover grew from N1.37Bn in 2020 to N3.52Bn in 2021. This represented an increase of 158.19% in the value traded. This improvement could be attributed to investors taking advantage of rising rates in the fixed income market.

 

NGX also made significant progress in its efforts on the introduction of Exchange Traded Derivatives. We witnessed the official launch of NG Clearing, Nigeria’s premier Central Clearing Counter Party (CCP). The Exchange also registered seven (7) contracts with the Securities and Exchange Commission (SEC) ahead of the launch of Exchange Traded Derivatives.

 

 

Some of the ground breaking achievements for the year include:

  • Customer Experience: In line with The Exchange’s drive to develop and improve the digital experience for our stakeholders, NGX launched the maiden edition of the Digital only version of the 2021 NGX annual Factbook (X-Factbook), and released an enhanced version of its X-Mobile App.
  • Listings: In the equities space, NGX listed Bricklinks Africa, NGX Group and Ronchess Global Resources Plc by introduction on The Exchange; while the fixed income market saw corporate bond issuances by BUA Cement Plc (N115Bn); CardinalStone (N5Bn); Nova Merchant Bank (N10Bn); Coronation Merchant Bank (N25Bn); etc.
  • Securities Lending: NGX grew the total value of securities borrowed/lent in 2021 to N513.10Mn up from N95.18Mn in 2020 and N340 thousand in 2019.
  • Market Making: Received approval on amendments to the NGX Market Making Rules and relaunched the NGX Market Making Program across the various listed asset classes.

 

In upholding its key pillars of sustainability, NGX recorded the following achievements:

  • Gender gap assessment report: NGX in collaboration with IFC launched the first-of-its-kind gender gap assessment report which highlights the gender gaps in Nigeria’s private sector through a study of the 30 most capitalized companies on NGX.
  • Peer-learning platform: NGX in collaboration with IFC launched a 2-year Peer Learning Platform to support listed companies in their quest to improve the gender performance in leadership, employment and entrepreneurship on Friday, 6 August 2021.
  • Participation in SSEI Workgroup on climate reporting: NGX participated in the Sustainable Stock Exchanges Initiative (SSEI) working group led by Mark Carney, UN Special Envoy for Climate Action and Finance to develop a Model Guidance on climate reporting for securities Exchanges. The Model Guidance was launched in July 2021.
  • International Women’s Day: NGX collaborated with International Finance Corporation (IFC), United Nations Global Compact Network Nigeria (GCNN) and UN Women to commemorate the 2021 International Women’s Day (IWD) and the 7th Ring the Bell for Gender Equality.

 

Looking ahead, Mr. Popoola highlighted five major areas NGX will be looking to make significant strides in 2022 as follows: building on digital transformation, listings and delistings, technology, partnerships, and sustainability.