A slow but steady resurgence

The Capital Market is making a comeback, and there are a good number of resilient companies and investors making this happen

In the heat of the capital market palaver of 2008/09, there was a joke about a marketer from an investment bank who approached a trader at Oyingbo market, in Lagos, to open a stock broking account. In bewilderment, the trader exclaimed, “so you are among the witches who want me to go back to Umuahia empty-handed abi?”

That is how unsellable capital market assets were in that era, banks refused them as collateral, investors were not ready to commit, many who had just qualified as stock brokers were disappointed while whole stock broking firms where depleted to a few a staff. Today, things are not the same.

A special report due to be published by BusinessDay’s Research Department indicates that, 25 CEOs of companies listed on the Exchange grew shareholders value by    N1.81trillion in 2012 alone, in the same market where many had given up hope.  In 2012, the Exchange was one of the top performing globally, its All Share Index grew 35.45%, and average daily turnover for equities was N2.65 billion, up by 2.71% compared to 2011.

In 2012, market capitalization of listed equities grew by 37.31% from N6.54 to N8.98 trillion. By the end of the year it had recorded two new equity listings on the main board and 10 new bond listings. Indeed, the market has not only improved in the past one year, there are even moves to deepen it further.

There were also moves to improve processes from the market’s management; the NSE executed a number of key strategic initiatives, among which were Primary Market Making, a suite of value-added services (Xvalue), and investments in two alternative trading platforms. As of today, there is an aggressive drive Market Capitalization to $1 trillion by 2016 and a number of reasonable steps are in place in this direction.

The outlook for 2013 is largely positive as changes implemented in 2012 begin to crystallize in 2013. By year end 2013, the Exchange expects to be well positioned to better meet clients’ needs, and absorb the forces of change reshaping global financial markets and the global exchange landscape. From the perspective of the Exchange, it is clear that now, processes are less stochastic; it has also vowed to continue with innovations centered on technology and product development, as well as policy changes. But the exchange is not alone in this drive for market development.

There are a myriad of companies which are making the new found ‘boom’ possible. A few of these have distinguished themselves by not only enduring through the time of crisis but continued in their drive to make research and advisory services available. They have promoted market activities are making returns to investors. They have kept the spirit of the Exchange alive.  

Our special report explores what some of them have done so far, what they plan to do in the next few years and the innovations which they plan to introduce to the investing public.