The Nigerian Stock Exchange (NSE) said it has outlined three initiatives for 2016 which is aimed at achieving the exchange strategic objectives. The Chief Executive Officer of NSE, Oscar Onyema briefed the media and market analyst on 2015 review and outlook for 2016.
According to him, the three strategic objectives includes, increasing the numbers of new listing 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.
On the prospect of the market for 2016, he pointed out that the capital market has the opportunity to effectively finance the Federal government proposed budget deficit for 2016 and implementation of its Medium Term Expenditure Framework (MTEF).
He said with greater clarity on policy direction, the NSE anticipate the return of investors who had remained on the side lines throughout 2015.
Stressing that This return is predicated upon return of investor confidence as a result of effective implementation and communication of the government 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, etc.); Improved security.
On the global economic outlook for 2016, Onyema noted that moderate growth is anticipated, as seen among emerging markets like Brazil and Russia which has materialized. He said the trend is likely to continue amid weakening oil and other commodity prices.
in Sub-Saharan Africa , while the recent performance of Nigeria and South Africa, has been lacklustre, the overall region has weathered the commodity slump better than Latin America and elsewhere, with growth slated at 4.3 percent in 2016, up from 3.8 percent in 2015.
He said this growth is expected to be supported by the moderate recovery in the global economy, and growth in low income developing countries which compared to 2015 are projected to grow by one more percentage point to 5.8 percent in 2016. Emphasising that uncertainty and volatility dominate forecast for the New Year and beyond as Nigeria struggles with commodity price shocks and the resultant impact on the Naira.
This according to him is also in the context of adjusting to new government policies targeting import substitution, inclusive growth, lower income focus, security, and eradicating corruption.
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 infrastructure and capital requirements.
Additionally, we plan to work with the FGN to ensure that the appropriate messaging 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.