NSE DG , Mr. Oscar Onyema

Weak demand for securities at the nation’s stock market in the first half of 2011 caused  a dip of 56 per cent  and 15 per cent in the amount invested in bonds and  equities respectively.

The stock market made a sluggish performance in the first half of 2011,  leading to  a marginal growth of 0.85 per cent by the Nigerian Stock Exchange (NSE) All-Share Index  compared with over 20 per cent growth in  the first half of 2010.

Data obtained by THISDAY last Monday showed that secondary trading in the Federal Government Bonds and investment in equities witnessed significant dip.

Trading of bonds at the over-the-counter (OTC) market declined by 56 per cent as investors staked N4.177 trillion on 4.717 billion units of bonds in 35,375 deals, down from N9.537 trillion invested in 7.964 billion units exchanged in 87,188 deals in the corresponding period of 2010.

At the equities market, investors staked N372.67 billion in 49.52 billion  shares in  the first half of 2011, down by about 15 per cent from N436.95 billion invested in 54.82 billion  in the corresponding period of 2010.

The data  obtained from the  Central Securities Clearing Systems (CSCS) showed  that apart from the  volume of dematerialised shares that increased by 53 per cent all other statistics  trended southward in the first half  of 2011.

In terms of volume, CSCS settled and cleared 49.52 billion shares in 2011, showing decrease of 9.7 per cent from 54.82 billion in 2010.  The number of shares in the CSCS used as lien fell by 35.9 per cent from 223 in 2010 to 143 in 2011. Only seven requests for certificates were made in 2011 compared with 41 requests in 2010.

The volume of dematerialised shares stood at 46.18 billion in 2011, showing an increase of 53 per cent from 30.26 billion shares. However, the number of the dematerialised shares fell by 38.3 per cent from 485,714 shares to 299,757 shares.

Market operators had attributed the lackluster performance of the Exchange in the first half  of 2011 to various reasons including lack of direction by the new management.

But the Chief Executive Officer of the NSE, Mr. Oscar Onyema was quoted as saying that the Exchange was targeting  a  value of   $1 trillion in five years.

According to him, the target would be met  by  attracting  more companies and planned demuatulisation of the Exchange.

“Our goal is to grow our market capitalisation from $74 billion to $1 trillion in five years. If we can attract the oil and gas sector, if we can attract the telecoms sector and power sector then we should be able to hit those numbers,” he said.

He noted that oil exploration, power and telecommunications companies were not  represented on the bourse, saying that this would be totally new areas for the exchange.

“ Agriculture is another area where we will be making a push as it’s underrepresented on the bourse and makes up 40 percent of the West African nation’s gross domestic product,. We really want them because we believe a well functioning capital market is a good barometer for the economy. So where these major sectors are not represented in our capital markets today we are not giving you an accurate picture of the economic potential of Nigeria,” he said.