The Chief Executive Officer, Nigerian Exchange Limited (NGX), Temi Popoola, says the Exchange will take a flexible approach to strategy execution in 2023, doubling down on its 2022 achievements and expanding on several levers.
Popoola, who said this at the NGX 2022 Market Recap and 2023 Outlook held on Wednesday, in Lagos, insisted that last year was “a good year for the Exchange despite global macroeconomic headwinds.”
In terms of performance, he said: “In 2022, the equities market performance was evidenced by the 19.98% increase in the NGX All-Share Index, which rose from 40270.72 to 51,251.06 just as the market capitalisation also closed at a high of N27.92 trillion, up from N21.06 trillion the previous year.
“The total turnover of trades in 2022 improved by 27% from N916 billion to N1.16 trillion year-on-year (YoY) from 2021. Market participation was heavily skewed to the domestic investors.
“The Fixed Income market saw a slight uptick in turnover to N3.89billion in 2022 from N3.53billion recorded in 2021. This represents a 10.20% YoY increase.
“The Exchange Traded Funds market capitalisation increased from N7.35 billion in 2021 to N8.42 billion in 2022, representing a 14.56% increase in the market capitalisation. Stanbic IBTC ETF 30 which tracks the performance of NGX 30 index was the best performing ETF in 2022, having begun the year at N68.5 and closed at N245, reflective of 257.66% returns. ETF transactions fell from N34.22 billion in 2021 to N211.02 million in 2022. This represents a 99.38% decline in ETF turnover.”
For the current year, Popoola said part of the plan is to drive more technology companies to the Exchange and deepen capital formation in the technology sector, especially as “…the NGX Technology Board Listing Rules were approved by the apex regulator, the Securities and Exchange Commission in December 2022.”
He also said the NGX is in consultations with stakeholders in the sector to secure a few big names within the year.
He continued: “On strategic partnerships, we will be forging more with development finance institutions, banks, both local and international to further develop the market.
“We aim to do more on trading where we improve data dissemination to attract a larger investor base, especially from the retail side.
“We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.”
NGX sees sustainability as not just important but also a profitable frontier of its business and work is on-going on developing a framework for certifications in carbon credits trading, pending regulatory approval.
Market sustainability
In regards to sustainability, Popoola noted that the NGX already demonstrated its commitment to sustainability in 2022 through a number of initiatives and collaborations.
He reiterated that “NGX sees sustainability as not just important but also a profitable frontier of its business and work is on-going on developing a framework for certifications in carbon credits trading, pending regulatory approval.”
In an effort to further catalyse Nigeria’s path towards reducing greenhouse emissions and aligning with the objectives of the Paris Agreement, he said the NGX last year collaborated with the International Finance Corporation (IFC) on a Green, Social and Sustainability Bonds workshop for capital market stakeholders.
“NGX, through its specialised knowledge platform, X-Academy, collaborated with NGX Regulation Limited (NGX RegCo) and Global Reporting Initiative (GRI) on a capacity building session focused on sustainability reporting and Environmental, Social, and Governance (ESG) disclosures for listed corporates,” he added.
On the capital market’s digital transformation, he said: “the Exchange is working on USSD launch in collaboration with telcos and banks; unlocking the African capital markets via payment integration with Afreximbank’s Pan African Payment Settlement System.”
The Exchange also plans to develop new products aimed at attracting the lower rung of the Nigerian demography, says Popoola.
“NGX is also 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,” he concluded.
