2016: New or supplementary issues not likely- Capital Bancorp

The primary end of the capital market is not likely to see many new or supplementary issues in 2016 as companies continue to see the recovery from 2015 shocks. Capital Bancorp Plc, a member of the Nigerian Stock Exchange (NSE) stated this in its overview of 2015 and outlook for 2016, remarking that, “In other words, the success of the Nigerian stock market is hinged on many factors.”

Amongst them are: “Effective implementation and communication of government economic policies; government focus on the real sectors of the economy to stimulate the economy; improved financial education among the citizenry by both regulators and operators and improved market participation by local investors and domestic
institutional investors.”

Others are continuous robust regulatory oversight of the listed companies; improvement in the provision of physical infrastructure in the key sectors like road, rail, and power will lower costs and impact companies’ earnings and disposable income; passage of Petroleum Industry Bill, unbundling of Nigerian National Petroleum Corporation and listing of the resultant companies; listing of already privatised companies like the Gencos and Discos and effective use of monetary policies.

Besides this, Capital Bancorp also noted some downside risks to the growth of the stock market in 2016. They include continuous drop in the crude oil prices, relatively attractive yields on fixed income securities, the depreciating naira as disincentive to foreign portfolio investment. According to the outlook since the stock market is a barometer of a nation’s economy, it suffices to say that the stock market will ideally move in the direction the economy goes.

“Looking at the performance of the market since the beginning of the year, it appears that the market will need to navigate through some challenges in the year, and one can only hope for a quick rebound as the economy gets better,” the report said.