Nigerian Exchange Limited (NGX) Limited, has recorded N4.3 trillion in listings across Equities and Fixed Income markets in 2022.
Capital is critical for business growth. Companies can raise capital through debt or equity. Debt is issued in the form of bonds, and equity is issued in the form of shares. When a company issues new bonds or common stock, it is referred to as a new issue.
The stock exchange, as an important component of the capital market, plays a significant role in the capital formation process because of the tremendous opportunities that ensue from its activities. The exchange is expected to mobilise long-term savings to finance long-term investment by providing risk capital in the form of equity or quasi-equity to entrepreneurs.
New issues are savings mobilised for investment purposes by companies and governments. The new issues market represents the primary arm of the capital market and shows how many financial resources are invested in long-term securities of corporate bodies and governments.
The listing of new issues in the market will deepen the market, improve liquidity and tradability of companies’ shares. Also, it will increase access to capital in order to fund companies’ future growth initiatives.
Speaking at the NGX 2022 Market Recap and 2023 Outlook held in Lagos, the chief executive officer, NGX, Mr Temi Popoola stated, “In 2022, the equities market performance was evidenced by the 19.98 per cent increase in the NGX All-Share Index. The total turnover of trades in 2022 improved by 27 per cent from N916 billion to N1.16 trillion year-on-year from 2021, while market participation was heavily skewed to the domestic investors. The Fixed Income market saw a slight uptick in turnover to N3.89 billion in 2022 from N3.53 billion recorded in 2021.”
He said the yearly performance can be attributed in part to the N4.3 trillion in listings recorded by NGX across equities and fixed income markets, saying that these listings included the raising of N2.54 trillion of bond listings for the Federal Government of Nigeria, as well as equity listings totalling N1.35 trillion from companies such as BUA Foods Plc and Geregu Power Plc.
“Corporate bond listings also contributed significantly to the Exchange’s performance, with a total of N364.78 billion raised through listed instruments such as Dangote Industries Plc’s N177.12 billion senior unsecured bonds, Lagos Free Zone Company SPV Plc’s N25 billion fixed rate infrastructure bonds and Ardova Plc’s N11.44 billion and N13.86 billion fixed rate senior unsecured bonds.
“NGX also listed FGN Multi-Tranche $4 billion Eurobonds which further demonstrated its diversity of offerings and its ability to attract a wide range of businesses looking to raise capital,” he added.
According to Popoola, the value of these listings displays NGX’s commitment to positioning itself as a premier location for capital raising and formation, as well as its ongoing development efforts in the Nigerian capital market post its demutualisation.
“The Exchange’s ability to facilitate a wide range of transactions and attract a diverse range of businesses highlights its position as a leader in financial market innovation and progress on the African continent.”
He also said that NGX partnered with MTN Nigeria to further enhance retail participation in the country’s capital market, noting that NGX also forged strategic partnerships by signing Memoranda of Understanding with the Bank of Industry and Dubai Financial Market to deepen the capital market and build capacity for inclusive growth.
The director-general of Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, recently said the Commission has been implementing measures aimed at encouraging more listings by creating new rules and amending existing ones, improving general review processes, continuing engagements with issuers, advisers and other critical stakeholders.
Yuguda said the Commission and the Nigerian Exchange (NGX) Limited have moved to make the processes involved in listing more efficient and cost effective by streamlining the approval process between the SEC and the NGX.
On 2023 outlook, Popoola said NGX would take a flexible approach to strategy execution in 2023, doubling down on its 2022 achievements and expanding on several levers.
He pointed out that the Exchange sets its sight on the development of new products aimed at attracting the lower rung of the Nigerian demography, saying “NGX is focused on increasing youth participation with the creation of digital asset products powered by Blockchain technology, non-depository receipts and overall increasing the pool of available liquidity in the market.
“Altogether, 2023 is likely to be a new dawn for the market and the Nigerian economy as significant events take shape in the macroeconomic and political environments.”
Chairman of BUA Group, Abdul Samad Rabiu stated, “I am delighted that yet another member of BUA Group has been listed on the NGX. This shows our commitment to national economic growth and support for the food security drive of the nation in alignment with global sustainability goals.
“We appreciate the continued support of our stakeholder’s financial advisers, stock brokers, suppliers, customers, consumers and members of staff. In particular, we cherish our host communities with whom we continue to entrench very strong and mutually beneficial relationships.”