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 stor se 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 c onfide nc e with e viving inve stor the ma rke t sho wing sig ns o f r y . e c ove r

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 o 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 o 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 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% Do wn b y 2.80% - T otal 16,251.81 16,720.72 Sourc e : NSE Re ports 6

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 34,000 11,500 33,000 11,000 32,000 10,500 Trillion Naira 31,000 Point s 30,000 10,000 29,000 9,500 28,000 27,000 9,000 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 Equit y Mar ket Capit alizat ion All-shar e I ndex Source: NSE Reports Note: Equities Market Capitalization include Main Board and ASEM 7

F ore ig n a nd Dome stic Portfolio Inve stme nt  T o 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 o 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 ore ig n T ra nsa c tions to tota l T ra nsa c tions a s a t Ma rc h 2015 % of F ore ign to T otal T otal T ransac tions F ore ign T ransac tion T ransac tions N’billion N’billion 184.02 102.56 55.73 Sourc e : NSE Re ports 9

SUMMARY OF NE W ISSUE S IN T HE F IRST QUART E RS OF 2014 AND 2015 No of Issue s Value of Issue s Mode of Offe r 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 otal 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 0 91,590.00 0 F GN Bo nds 9 6 239,500.00 265,000.00 T otal 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 So urc e : SE C & DMO 1 0

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 o 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, o f the to ta l funds unde r ma na g e me nt. 1 2

CI S Sc he me s Co ntd. 2015 2014 Re marks No . o f Re g iste re d Sc he me s 52 53 Do wn b y 1.9% (As a t Ma rc h) 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%  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

Complaints r e c e ive d and r e solve d as at the e nd of Mar c h, 2015 Chart Title Complaints Received Complaints Resolved 71 1 66 65 55 37 39 33 34 21 21 3 oct nov dec jan feb Mar 1 4

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 of 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 o 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 2 nd 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 on 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 st December 201 4 to 30 th S from 31 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 of compliance isencouraging although wewill conduct averification exerciseat the end of the exercise to verify compliance. st March 201 S o far, the level of compliance asat 31 5 isas follows: 22