By Chioma Obinagwam
The lingering oil crisis has impacted negatively on the Nigerian Stock Exchange(NSE) as the it’s Market Capitalisation suffered a whooping $30 billion loss.
The Chief Executive Officer(CEO) of NSE, Oscar Onyema made this known to newsmen during the NSE 2015 Market Recap & Outlook for 2016 press briefing held in Lagos recently.
Oil prices had tumbled from about $98 a barrel two years ago(2014) to below $30. The biggest factor was unrestrained production across the world, which led to a huge supply glut.
The NSE boss noted that despite these huge losses, the Nigerian bourse did not shutdown for a day.
Contrary to popular opinions that market makers had not impacted on the market, he stated, the Exchange was able to survive t to activities of market makers.
“The work of market makers is to provide continuity in the market place. Their work is not to stop the market from going in a particular direction. From when the oil prices began, we have lost $30 billion in Market Capitalisation that is why the market was not shut down,” Onyema said.
” The market makers have done their function. They are not perfect and we will continue to encourage them,” he added.
He noted that the recent downward trend witnessed by the Nigerian bourse is not peculiar to Nigeria alone; adding that the indices of 24 out of 25 exchanges were down in dollar terms.
He noted that the process of demutualising the exchange is still on-going and added that it is a longterm process but that the Exchange already has a framework in place for it.
Onyema, however, refuted claims from some quarters that failure the board of Investor Protection Fund(IPF) to announce the names of the recent beneficiaries of the fund was for ulterior purposes.
“The IPF Board of Trustees has continued to work to ensure that they meet the criteria. Be rest assured, we have nothing to gain if we lie about it- that we have paid N42 million,” he stated.
Onyema noted that the Exchange would continue to dialogue with the Federal Government to ensure that state owned enterprises are listed in the capital market to unlock government’s potential.
He said the recent pronunciation by the Minister of State for Petroleum Resources, Dr. Ibe Kachiukwu, that the NNPC was looking at raising Initial Public Offer (IPO) was encouraging.
He said that the downturn from 2015 had already continued into the New Year. “Accordingly, we anticipate 2016 to be a challenging year for the capital market and the domestic economy.”