AIG-Imoukhuede completes tenure as NSE President

….as bourse release 2016 financial scorecard

The president of the Nigerian Stock Exchange (NSE), Mr Aigboje Aig-Imoukhuede has announced the conclusion of his tenure as President at the local bourse.

This he disclosed within the recently released annual report of the NSE, as a most fulfilling three years.

Aig-Imoukhuede wrote in the report that “As I conclude my tenure as President of the National Council of the Nigerian Stock Exchange (“NSE” or “The Exchange”), it is with a great sense of humility and fulfilment that I reflect upon three memorable and fulfilling years of service in this prestigious role.”

“When I came into office in 2014, I pledged that the NSE would strive to operate at a level comparable to our peers in more advanced economies. I did this with the understanding that the correlation between world class capital markets and high performing economies is very strong.

My view, then and now is that as a flag bearer of global best practice and in its unique position as the nation’s leading capital market platform, the NSE would be a beacon and rallying point for other stakeholders to come together and accelerate Nigeria’s transition from frontier to emerging capital market status.” he said

Reflecting on the performance of the exchange in the 2016 financial year, the NSE President paired the result against Nigeria’s worsening operating environment.

The environment he said, impacted negatively on activities in the Nigerian capital market.

“Activities slowed down considerably and trading volumes, liquidity and market velocity declined to near all-time lows, it is against
this backdrop that The Exchange generated revenues of N4.46Bn, down 31per cent from the previous year, reflecting bearish sentiments prevalent in the market in 2016 and recorded a deficit of N599Mn for the period.” he said

The NSE President however commended the Council and Management for their cost containment efforts and their diligent approach to budgeting which saw total expenses decline by 12% year-on-year without affecting The Exchange’s high operating standards and service quality.

He further stated that the NSE “At the Group level remained profitable with an operating surplus of N27.45Mn thus ensuring that as we take the final steps towards demutualization, we do so from a robust and healthy financial position.”

Meanwhile, The NSE’s financial statement of account, showed a 99.8 per cent decline in its group total comprehensive income for the period ended 31st December 2016.

The annual report obtained by our correspondent showed that the group’s income for the year declined from N1.9 billion recorded at the end of the 2015 financial year to N33.6 million as at December 2016.

The result also showed that revenue for the local bourse dropped to N4.46 billion from N6.61 billion recorded as group revenue in 2015.

Defending the results, the NSE CEO, Mr Oscar Onyema, maintained that the NSE Group demonstrated resilience through the economic and market downturn, closing the year with a modest profit after tax of N27.45Mn.

He said the group’s profitability is further evidenced by a low debt capital structure and liquid balance sheet, adding that as a reassuring indication of the NSE’s ability to fund its strategic growth ambitions and remain competitive going into the future.”

He said the total income of the Group which declined 33 per cent to N4.46 billion is as a result of investors reaction to prolonged macro-economic uncertainty.

For the Exchange, he said “Top line income streams were impacted during the year, being transaction fees which fell 37 per cent to N1.63 billion, and listing fees which declined by 41 per cent to N813 million. This culminated in a negative year end performance for
The Exchange of N599 million.

Onyema, however, noted that “These figures mask some encouraging strategic shifts in our business, as Management intensified efforts to diversify the NSE’s revenue streams.

“We saw the strongest results of this in our market services income, which has grown by 63% since we embarked on our new five-year strategy in 2014, rising from less than 3% of The Exchange’s total revenue mix to 9% (N415Mn) in 2016.

“This growth is a direct result of our commitment to flexibly meet our customers’ evolving needs for data and information products.

The NSE’s total assets as at December 31 2016, stood at N22.79Bn, with approximately N9.73Bn (43%) held in liquid assets and an accumulated fund of N19.31Bn, to close the year with a sound liquidity position and strong.

Speaking on the outlook for 2017, Onyema, stated that going by the IMF’s most recent forecast, the Nigerian economy is expected to emerge from recession to grow 0.8% in 2017.

Onyema said “This projection presents a positive outlook for the NSE in the coming year, as we anticipate the reallocation of assets to frontier and emerging markets.

“Any potential market rebound is critically dependent on the ability of government and regulators to implement policies that provide stability to the marketplace and enhance investor confidence.

Towards this, he said “The Exchange remains committed to engagements with market stakeholders, government and the private sector to explore synergies that can emerge from complementary actions in both policy development and implementation.”