Govts, Firms Raise N4tn from Capital Market in 2020

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Goddy Egene

Using the trading facilities of the Nigerian Stock Exchange (NSE), governments and corporates raised about N4.015 trillion from the nation’s capital market in 2020, according to data obtained by THISDAY at the weekend.

The local bourse recorded a stellar performance last year, soaring by about 50 per cent to lead other global markets. Investors reaped significant capital gains as most stocks hit record highs.

THISDAY checks showed that apart from individual investors, the federal government and some companies also benefitted from the market last year, as they raised various sums despite the negative impact of the COVID-19 pandemic.

The funds were raised through bonds and equity issuances. However, the bond market accounted for the highest of capital raise as the federal government and companies raised N2.6 trillion from the bond market. Also, companies raised N1.415 trillion through equity offerings.

The government dominated the bond issuance, accounting for over 90 per cent while in the equities space, companies raised N1.415 trillion through rights issue and mergers and acquisition (M&A).

Some of the issuers included: BUA Cement Plc, Dangote Cement Plc, Flour Mills Nigeria Plc, UACN Property Development Company Plc, United Capital Plc, LAPO

Microfinance Bank Limited and Interswitch and Axxela Limited among others.

The Divisional Head, Listings Business, NSE, Mr. Olumide Bolumole, had said as a platform for capital formation, the NSE had products and services to support capital raising across economic sectors,

According to him, the exchange is committed to educating business promoters on the alternative funding opportunities available in the capital market to catalyse business growth.

Also, the NSE will continue to deliver on its promise to provide a platform for issuers and investors to meet their financial objectives even in the most difficult times.

Contrary to apprehensions that the COVID-19 pandemic that led to the lockdown of the nation’s economy for months last year would affect trading on the exchange, the market showed resilience, ending with a better performance.

The Chief Executive Officer (CEO) of NSE, Mr. Oscar Onyema, had said the exchange activated a robust business continued plan and was able to keep the market open.

“We received requests from investors and issuers seeking clarification on the exchange’s business continuity plans and ability to keep the market open. This was clarified early enough as details of our robust response to COVID-19 were communicated to all stakeholders and we have enjoyed seamless remote operations since. This was, however, possible because of our commitment to digital transformation, which began several years ago and continues to evolve with today’s emerging trends,” he said.

Meanwhile, in order to enhance the experiences of stakeholders in the public offerings value chain, by providing a smarter and efficient way to manage public offers(POs) in the Nigerian capital market, the NSE has launched the X-PO.

The X-PO, the first end-to-end online public offerings platform in Africa is a self-service portal, which allows investors to conveniently subscribe and make payments for public offers through the web and mobile (USSD), avoiding the hassle of physical completion and submission of public offering applications forms and visiting the bank for payment.

According to Onyema, “The launch of the X-PO platform reinforces the exchange’s commitment to revolutionise stakeholders’ experience in the Nigerian capital market leveraging technology. The X-PO has been designed to enhance the efficiency of PO subscription process and operational workflow to support issuers in raising capital and enhance the reach of POs while promoting financial inclusion and retail investors’ participation in the market. Furthermore, X-PO will accelerate the reconciliation and allotment process for POs, as well as reduce the incidence of unclaimed dividends, thereby boosting investor confidence in the capital market.”

He said the exchange would continue to innovate and adapt to new technologies to not only help companies improve operational efficiency, but also enhance corporate governance, which is paramount for sustainable business operations.

“The launch of the X-PO is particularly timely given the new normal occasioned by the COVID-19 pandemic. The platform’s sustainable approach affirms NSE’s commitment to deploying environmentally friendly business practices and promoting paperless public offer subscriptions. We have also taken into consideration the vital need for privacy and data protection, deploying the highest levels of security to ensure that stakeholders can enjoy a safe and secure digital public offering experience,” Onyema added.

He stated that players within the capital market, investors, registrars, issuing houses, brokers, banks and regulators, can expect to enjoy a wide range of benefits with the launch of X-PO..