The Director General, Securities and Exchange Commission,
Honorable Members of the Capital Market Correspondents Association,
Distinguished Guests, Ladies and Gentlemen,
It gives me great pleasure to be speaking here today at the 2015 Capital Market Correspondents Association of Nigeria Workshop. I am honoured to have this opportunity to share some exciting thoughts with this constituency with whom the Exchange shares a common vision for the growth and development of the capital market In Nigeria.
Let me start by commending the Executive Committee of the Capital Market Correspondents Association of Nigeria (CAMCAN), led by its President, Mr. Goddy Egene, for their purposeful and visionary leadership.
I would also like to congratulate members of this workshop planning committee for their hard work in making this workshop a success. The Nigerian Stock Exchange is extremely proud to be associated with CAMCAN and we will continue to seek creative and progressive ways of partnering with the association on developing more of its initiatives.
I believe we are all here today, because we recognize the important role of capital market in engendering financial stability and inclusive economic development. All over the world, this sector has, and will continue to provide a ‘tried and true’ platform for economic development. The capital market provides a vehicle for efficient capital allocation, allowing funds (specifically savings) to be allocated to investment projects and companies that bring the most value to the economy.
This year’s theme “Effective Reporting of Changes in the Nigerian Capital Market” validates CAMCAN’s commitment in contributing its quota to the continued growth and development of the Nigerian economy through the capital market. I would like to compliment the association for this topical theme which demonstrates a keen appreciation of the role of the media in building a virile capital market.
The Nigerian capital market and the business of the stock exchange will always be impacted by dynamic economic trends and investor demands. However, achieving success through growth that creates value will increase the bourse’s ability to operate efficiently and profitably in the transient advantage economy that has unfolded in Nigeria and around the world.
While there has been no respite in the macro economy and operating environment due to lingering oil price and foreign exchange pressures, our long-term outlook for the Exchange remains positive as listed companies continue to show resilience and our members have been repositioned to deliver superior value to investors. It is important to note that we are not the only exchange affected by these global developments of all the 24 exchanges in Africa, 20 are experiencing a downturn.
Opportunities still exist for investors in stocks, in spite of the current downturn in the capital market. If you look at large, mid and small cap securities; mid cap securities have done well, they have returned about 6 percent positive. Now the whole market is about 18 percent down and that is because of the weight of the large cap securities.
So it is important for investors to dig deeper and understand the dynamics of the market with the help of professionals like you. Investors also need to understand that there have been significant sell-offs between last year and this year and it could present opportunity.
Again, it is important to do the analysis, understand where those opportunities are but certainly there are opportunities, not only in the equity side but across the various asset classes. We always advise investors to diversify their portfolios across different assets classes to mitigate risks.
At the Exchange, a lot of our energy has been spent building the foundational aspect of the market in terms of transparency, orderliness, fairness, disclosure, and more importantly how we enforce our rules and regulations. In the short term, you will see the huge volatility but that should not distract from those fundamental elements about good companies, making good money, running under a well governed Exchange structure and a well regulated market structure. These factors will combine to shore up investors’ confidence in these challenging times.
As we continue to work towards achieving and sustaining this market, the importance of your role cannot be over emphasized. Financial journalists have the potential to influence investors’ behaviour. Negative reporting may result in sensationalism and put additional pressures that can force investors’ decisions negatively.
Throughout the history of The Exchange your presence has helped to project and promote the capital market. We believe that our success has been your success. It is our hope that we will continue to play our various roles in the transformation of the Nigerian capital market and this same measure of commitment will lead us to all-round market improvement in 2016.
I wish you successful deliberations at this gathering and I challenge us all to maximize the wealth of diverse experience that has been put together for this workshop. My favourite African quote states – if you want to go fast, go alone, if you want to go far, go with others!!! Clearly, NSE wants to go far – that is why we are here today. I am convinced that this marks the beginning of a high impact journey towards building the future that we all desire!
Again I thank you for your unflinching support over the last couple of years in helping grow our market and we look forward to our future collaboration.
Thank you.
Oscar N. Onyema, OON
Chief Executive Officer, NSE
November 28, 2015