T he ma c ro e c o no mic a nd g e o po litic a l c o nditio ns - - PowerPoint PPT Presentation

• T

he ma c ro e c o no mic a nd g e o po litic a l c o nditio ns tha t pre va ile d in 2014 we ig he d do wn ma rke t pe rfo rma nc e . T he re wa s a ne t o utflo w o f fo re ig n po rtfo lio inve stme nts fro m the do me stic bond ma r

ke t in 2014 a ltho ug h b o nds

ma inta ine d re la tive ly hig h yie lds re turning +11%. In the e quitie s ma r

ke t, NSE

’ s All-Sha re -I nde x de c line d by

16.14% Colle c tive Inve stme nt Sc he me s (CIS) o utpe rfo rme d the

ma rke t in 2014 c lo sing a t a g g re g a te ne t a sse t va lue (NAV) o f N176 b illio n, a 14% a ppr

e c ia tion c o mpa re d to

the 16 pe rc e nt de pre c ia tio n o f ma rke t indic e s.

T he unc e rta intie s whic h ma rke d the first q ua rte r o f the ye a r o wing to the g e ne ra l e le c tio ns le d to ne g a tive

inve storse ntime nts a s a sse t pr ic e s fe ll.

T ha nkfully, the e le c tio ns we nt we ll a nd the e me rg ing pe a c e ful tra nsitio n is r

e viving inve stor c onfide nc e with

the ma rke t sho wing sig ns o f r

e c ove r y.

MARKE T PE RF ORMANCE ASI & MARKE T CAP

 In the first q ua rte r o f 2015, the All-Sha re inde x c lo se d a t 31,744.82 po ints, de pre c ia ting b y 8.40% whe n c o mpa re d to its va lue o f 34,657.15 po ints a t the e nd o f 2014.  De b t ma rke t c a pita liza tio n c lo se d the q ua rte r a t N5.52 trillio n while E T Fma rke t c a pita liza tio n a lso c lo se d a t N4.20 b illio n.  Y-O-Y c o mpa riso n sho ws De b t Ma rke t Ca pita liza tio n a ppre c ia ting b y 29.37% whe n c o mpa re d to N4.27 trillio n in Ma rc h 2014. E T FMa rke t Ca pita liza tio n a lso inc re a se d b y 36.67% a s liste d E T F s inc re a se d fro m o ne a t the b e g inning

• f 2014 to fo ur a t the e nd o f 2014.

4

MARKE T PE RF ORMANCE Contd

 E q uity Ma rke t Ca pita liza tio n d e pre c ia te d  b y 6.62% o n a ye a r-to -d a te b a sis; whe n c o mpa re d to its va lue in Ma rc h 2014, the ind e x lo st 13.84%.  T

• ta l Ma rke t Ca p sto o d a t N16.25 trillio n

a s a g a inst N16.72 trillio n in Ma rc h 2014, ind ic a ting a d e c line o f 2.80%.

5

Ma rke t Ca pita liza tion (N’BN) –Q1 2015

6 Sourc e : NSE Re ports

Mar ke t Capitalization (N’BN) 2015 2014 Re mar ks

• E

q uitie s 10,726.11 12,449.66 Do wn b y 13.84%

• De b t Se c uritie s

5,521.50 4,267.99 Up b y 29.37%

• E

T F 4.20 3.07 Up b y 36.81%

• T
• tal

16,251.81 16,720.72

Do wn b y 2.80%

ASI & Ma rke t Ca p Contd

All- Shar e Inde x (ASI) and E quitie s Mar ke t Capitalization (E CM) for Q1 2015

Source: NSE Reports Note: Equities Market Capitalization include Main Board and ASEM

7

9,000 9,500 10,000 10,500 11,000 11,500 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000

5-Jan 12-J an 19-J an 26-J an 30-J an 2-Feb 9-Feb 16-Feb 23-Feb 27-Feb 2-Mar 9-Mar 16-Mar 23-Mar 31-Mar

Trillion Naira Point s Equit y Mar ket Capit alizat ion All-shar e I ndex

F

• re ig n a nd Dome stic Portfolio

Inve stme nt

 T

• ta l tra nsa c tio ns de c re a se d b y 3%

 fro m N189.72 b illio n in Ja nua ry to N184.02 b illio n in Ma rc h 2015.  F

• re ig n po rtfo lio tra nsa c tio ns a c c o unte d

fo r 55.73% o f to ta l tra nsa c tio ns in Ma rc h 2015 while do me stic tra nsa c tio ns a c c o unte d fo r 44.27%.  In the c o rre spo nding pe rio d o f 2014, fo re ig n po rtfo lio tra nsa c tio ns ha d a c c o unte d fo r 78.25% o f to ta l tra nsa c tio ns while do me stic tra nsa c tio ns a c c o unte d fo r 21.75%

8

Ra tio of F

• re ig n T

ra nsa c tions to tota l T ra nsa c tions a s a t Ma rc h 2015

Sourc e : NSE Re ports 9 T

• tal T

ransac tions N’billion F

• re ign T

ransac tion N’billion % of F

• re ign to T
• tal

T ransac tions

184.02 102.56 55.73

SUMMARY OF NE W ISSUE S IN T HE F IRST QUART E RS OF 2014 AND 2015

So urc e : SE C & DMO 1

Mode of Offe r No of Issue s Value of Issue s Q1 2015 Q1 2014 Q1 2015 Q1 2014

Rig hts

• 1

1,216.18 1,216.18 Pla c e me nts 3 1 7,346.57 700.46 Pub lic Offe ring 1 1 19,590.03 88,485.30

T

• tal E

quitie s 4 3 26,936.6 90,401.94

Co rpo ra te Bo nd 2 1 37,500.00 4,500.00 Sub -na tio na l Bo nd 6 91,590.00 F GN Bo nds 9 6 239,500.00 265,000.00

T

• tal

De bt Se c ur itie s 17 7 368,590.00 269,500.00 Ove r all 21 10 395,526.60 359,901.94

CIS Schemes

 T he c a pita l ma rke t still re ma ine d a pre fe rre d inve stme nt o ptio n fo r fund ma na g e rs, whe n c o mpa re d with the mo ne y a nd o the r ma rke ts fo llo wing impro ve d re g ula to ry e nviro nme nt.

1 1

CIS Schemes Contd

 A q ua rte rly se c to ra g g re g a te a na lysis o f e ig hty-fo ur(84) F und/ Po rtfo lio Ma na g e rs b a se d

• n the ir re turns sho ws to ta l

funds unde r ma na g e me nt o f N498.1b illio n.  Out o f this, Inve stme nts in c a pita l ma rke t a c c o unte d fo r 58%, while inve stme nts in mo ne y a nd o the rinstrume nts we re 33% a nd 8%, a nd uninve ste d fund 1% re spe c tive ly,

• f the to ta l funds unde r ma na g e me nt.

1 2

CI S Sc he me s Co ntd.



So ur c e : SE C and is base d o n the r e tur ns submitte d by fund manage r s 1 3 2015 2014

Re marks

No . o f Re g iste re d Sc he me s (As a t Ma rc h) 52 53 Do wn b y 1.9% No . o f Unit Ho ld e rs (As a t Ma rc h) 176,771 169,172 Up b y 4.5% Ne t Asse t Va lue (NAV) o f Re g iste re d Sc he me s (B’ N) (As a t Ma rc h ) 178.79 164.90 Up b y 8.4%

Complaints r e c e ive d and r e solve d as at the e nd of Mar c h, 2015

1 4

37 55 66 21 71 1 3 33 21 39 34 65

• ct

nov dec jan feb Mar

Chart Title

Complaints Received Complaints Resolved

MAJOR I NI T I AT I VE S

1 5

NEW M ANAGEM ENT

 A new management is in place and records show

appreciable progress in some of the areas that are critical for market growth and development. These include:

 Strengthening and Refocusing the SEC:

We are streamlining the operations of the Commission to focus on its core mandates as apex regulator. We believe this will make us more effective and

• efficient. We have put a new organizational

structure in place and have commenced implementation.

1 6

 Demutualization:

One of my earliest actions as Ag. DG was to get the Honourable Minister of Finance/CME to approve the rules on demutualization which had stalled for some time. We have finally released those rules which should form a good basis for the NS E to proceed on its demutualization plans.

 Securitization:

We expedited efforts to release the Rules on S ecuritization. We hope the market leverages the Rules to grow this new product which can have a transformational impact on housing, infrastructure and business financing.

1 7

 National Investor Protection Fund:

Recall that the SEC had incorporated the NIPF since last year. Within the first three months of 201 5 we have completed and released the Rules on NIPF which should impact retail investor confidence.

1 8

 Trading in Unlisted Securities:

We released Rules mandating the trading

• f unlisted securities of public companies

exclusively on S EC-registered OTC platforms. This should improve the level of price discovery, liquidity, transparency and best practice in our market.

 Code of Conduct:

We have released Codes of Conduct for operators including Rating Agencies, Underwriters and Trustees. These will no doubt consolidate our zero tolerance for market infractions.

1 9

 General Review of SEC Rules:

We have worked on reviewing all areas of observed lapses in the regulatory framework. S

• far we have

released amendments on areas such as Mergers & Take-Overs, Registration Requirements, Utilization of Bond Issues Proceeds among others.

 Corporate Governance Scorecard:

We have completed work on the Corporate Governance S

• corecard. At a meeting with the NS

E we decided to harmonize the S corecard with the NS E’s Corporate Governance Rating S

• ystem. The end product will be

released within the 2nd quarter.

20

 E-Filing:

This is a priority for us. We want to shorten approval periods and enhance cost-saving by enabling operators file their returns and applications electronically . We will ensure the work is completed and launched this year.

 Direct Cash Settlement:

A market-wide implementation committee for Direct Cash Settlement has already commenced work and will target full implementation within the year.

21

 Robust Public Enlightenment Campaign:

S EC hasdone agood deal of public enlightenment

• n market initiativessuch as e-Dividends,

Dematerialization and so on. Wewill be launching a, comprehensive, nationwide public enlightenment campaign acrossthe nooksand cranniesof Nigeriasoon.

 Recapitalization of Market Operators:

The S EC Board granted an extension of the deadline from 31

st December 201

4 to 30th S eptember 201

• 5. Weset up

a market Committeecomprising S EC, NS E and CS CSwhich have been working with tradegroupsto address related issues. Based on the latest returnswereceived, the level

• f compliance isencouraging although wewill conduct averification

exerciseat the end of the exercise to verify compliance. S

• far, the level of compliance asat 31

st March 201

5 isas follows:

22

F unc tion

• No. of CMOs
• No. of CMOs that

have c omplie d

• No. of CMOs ye t

to c omply L e ve l of c omplianc e

Bro ke r/ De a le r 235 135 98 57% I ssuing Ho use 72 66 6 92% Re g istra r 22 15 7 68% T ruste e s 28 12 16 43% Ra ting Ag e nc y 5 3 2 60% F und / Po rtfo lio Ma na g e r 87 71 16 82%

T

• tals

449 302 144 67% 23

International Re-positioning

With my election as chair of the Africa Middle East Regional Committee (AMERC)

• f IOSCO at the conference in Oman in

February 201 5, Nigeria continues to show leadership among our peers and push for greater visibility for our market. In the same vein, SEC has recently been admitted as a full member of Islamic Financial Services Board (IFSB). This will go along way in supporting our efforts to deepen the non-interest products space. SEC Nigeria therefore joined CBN and NAICOM in strengthening Nigeria’s position on this platform.

24

WAY FORWARD 2nd – 4th Quarter 2015

25

 Strengthening the Regulatory Framework :

There are a number of Rules in the pipeline which we will be releasing within the year to further strengthen the regulatory regimes across the market. Some of these include:

26

SN PROPOSE D RUL E DE SCRIPT ION

1. Ad d itio na l disc lo sure re q uire me nts fo r Oil & Ga s E xplo ra tio n a nd Pro duc tio n Co mpa nie s T he se Rule s will c o ve r the te c hnic a l pe c ulia ritie s o f e xplo ra tio n a nd pro duc tio n c o mpa nie s so the inve sto r c a n be be tte r info rme d in de c isio n-ma king 2. Rule s

• n

F und/ Po rtfo lio Ma na g e me nt Ope ra tio ns T

• e sta b lish

thre sho lds b e twe e n re ta il inve sto rs a nd hig h ne two rth inve sto rs a nd spe c ify the type s o f instrume nts fund ma na g e rs c a n inve st in. 3. Rule s o n Unc la ime d Divide nds We ha ve a lre a dy e xpo se d the se Rule s a nd re c e ive d c o mme nts. We will e nsure the Rule s a re fina lize d a nd re le a se d within this q ua rte r 4. Rule s

• f

the Afric a E xc ha ng e Ho lding s (AF E X) T he se Rule s will g uide the

• pe ra tio ns
• f

a c o mmo ditie s e xc ha ng e . 5. F MDQ Sho rt T e rm No te s Quo ta tio n Rule s a nd FMDQ Co mme rc ia l Pa pe rQuo ta tio n Rule s We a re me e ting with the F MDQ T e a m to c la rify pro visio ns o f the se Rule s whic h c o nc e rn sho rt te nure d instrume nts tra de d o n the F MDQ pla tfo rm 6. Ame ndme nts to NSE Rule s. T he se inc lude

• n

I nc lusio n

• f

Re ta il Pa rtic ip a nts in Se c uritie s L e nding T ra nsa c tio ns; L isting o f Sukuk; a nd Pric ing Me tho do lo g y T he Rule s a im to b o o st liq uid ity in the ma rke t b y allo wing re ta il inve sto rs to pa rta ke in se c uritie s le nding ; E xpa nd the Isla mic fina nc e spa c e a nd impro ve a sse t pric ing 27

Empowering Trade Groups and SROs

 While we seek to focus more on the big

issues, we are committed to empowering Trade Groups and SROs to play more important roles in regulating their members. An example is the new Complaints Management Framework which we have released that ensures Investor complaints are dealt with more efficiently, starting from the operator, to the Trade Group

• r SRO level before reaching the SEC, if it still

remains unresolved.

28

IMPL E ME NT AT ION OF CAPIT AL MARKE T MAST E RPL AN

Having launched the 1 0-Y ear Capital Master Plan last year, and moving forward, our focus in 201 5 will be on the implementation of the 3 master plan reports to drive market growth. Our targets for the next quarters as contained in the master plans include:



Inaugurating an Implementation Council.

 Reduction of transaction costs in our market.  Completion of E-filing Project.  S

peeding up approval processes

 Working on the Framework for Unified Licensing 

Across Money and Capital Markets.

29

IMPL E ME NT AT ION OF CAPIT AL MARKE T MAST E RPL AN

 Conclude the dematerialization process  Definition of minimum technology S

tandards for all Market Operators.

 S

et up an Inter-Agency Committee between S EC and PENCOM to work on both the guidelines for PFA’s asset selection, and on releasing the Guidelines on Non-Interest Multi-fund structure for RS A funds.

 S

et up an Inter-Agency Committee between S EC and CBN to fastrack guidelines on liquidity status of Non-Interest Capital Market Products, as well as consider issuance of non-interest-T-bills and other short-term notes.

30

FINANCIAL INCLUSION STRATEGY

 We will develop a financial inclusion strategy

framework for the Nigerian capital market with the aim of increasing the number of Nigerians that have access and participate in the capital market.

31

T hank Yo u

32