Click to edit Master title style THE NIGERIAN CAPITAL MARKET UNTAPPED OPPORTUNITIES ASSOCIATION OF ASSETS CUSTODIANS OF NIGERIA Presented By Ade Bajomo Executive Director, Market Operations and Technology 8 th May 2013 1
Click OUTLINE to edit Master title style 1 2 3 4 5 8 9 Economic and Social Dynamics of Nigeria Capital Market Trends Untapped Opportunities Building Blocks To Tapping the Opportunities Barriers and Actions Tapable Opportunities Q & A
Click About to The edit Nigerian Master title Stock style Exchange 5/7/2013 The Nigerian Stock Exchange 3
Economic Click to edit Snapshot Master title The style Good & not so Good Highlights 2013 Est. GDP Growth 7.3% (2012 6.6%) Inflation trending south at 11.4% (2012-12.1%) 2013 Est MPR Rate 10.5% (2012 12%) Current account surplus at 8.9% of GDP Stable Foreign Exchange outlook @ $1/N156 Foreign Reserve USD 47.63Bn (2012 USD 44Bn) Improved Credit Rating (Fitch BB-/Stable, S&P B+/Stable ) amidst global sovereign downgrades Unemployment 24% Security concerns - Boko Haram incidents up on 2011 Governance concerns requires ongoing remediation Still a difficult place to do business (138 th globally) Power deficit - output at 4000 MW (Rqd 35000 MW) Robust short and medium term economic performance in the backdrop of ongong global economic crisis 5/7/2013 The Nigerian Stock Exchange 4
Click Emerging to edit from Master the Frontier title style Nigeria Source: The Economist Emerging in the midst of submerging economies 5/7/2013 The Nigerian Stock Exchange 5
Click What to We edit Do Master Now Matters title style GDP Per Capita (in USD at constant prices since 2000) Country 1970 2012 %Change China 122.29 2634.71 2054% Ghana 294 402.7 37% Kenya 291.49 478.22 64% South Africa 3104.02 3825.09 23% Nigeria 222.18 1452.09 554% Source: Trading Economics The difference 30 years make in comparative numbers Nigeria s GDP Per Capita outperformed China barely thirty years ago, yet China is now miles ahead, having successfully untapped its opportunities 5/7/2013 The Nigerian Stock Exchange 6
Click Market to edit Snapshot Master Trending title style in right direction 5/7/2013 The Nigerian Stock Exchange 7
Click Capital to Market edit Master Performance title style Standing out in the pack Source: Investing in Africa. Data as at 30 th April 2013 5/7/2013 The Nigerian Stock Exchange 8
Click Tappers to edit Delight Master (1) title style 5/7/2013 The Nigerian Stock Exchange 9
Click Building to edit Blocks Master to Tapping title style The Opportunities LISTING RETAIL PARTICIPATION REGIONAL COLLABORATION 5/7/2013 The Nigerian Stock Exchange 10
Click Tapping to edit Listings Master Opportunities title style Sector Share of GDP Market Capitalisation Agriculture 43% 5% Oil & Gas 14% 5% Power 3% 0% Telecoms 6% 0% Market Captalisation as % of GDP - 18% NSE Initiatives Increased Business Development Efforts Revised Listing Rules Focus on SMEs (ASEM) Board Value Added Services for Listed Companies Partnerships for Corporate Access Services Outreach through Branches on Benefits NSE Advocacy Sovereign Divestments to Capital Market Investment of Sovereign Wealth Fund Revised Pension Coy Participation Thresholds Broker Access to Funding Targeted Tax Breaks for Listed Companies 5/7/2013 The Nigerian Stock Exchange 11
Click Tapping to edit Market Master Structure title style Opportunities Securities Lending and Covered Shorts The Big Local Market Players Pension Assets Now > N3Tr (USD 20 bn) SWF Seed Capital at USD 1 bn (with estimated quarterly inflows of USD5Bn) SWF has Future Generation, Stabilisation and Infrastructure funds AMCON Assets (approx USD 500m in equities holding) 5/7/2013 The Nigerian Stock Exchange 12
Click Tapping to edit Products Master Opportunities title style Bond Market Govt. Bonds-Federal Govt. Bonds-State & Local Corporate Bonds/Debentures Options Market (2013) Stock Options Bond Options Index Options Equities Market Main Board Alternative Securities Market (ASeM) Global Depository Receipts Futures Market (2016) Currency Futures Interest Rate Futures Etc. ETF Market ETFs and Indices 5/7/2013 The Nigerian Stock Exchange 13
Click Tapping to edit Technology Master title Opportunities style Delivering unprecedented level of automation, transparency and customer experience 5/7/2013 The Nigerian Stock Exchange 14
Click to edit Master title style Wider Market Opportunities Custodian Perspective Transaction Cost Analysis Direct Cash Settlement Trade Allocation and Post Trade Automation Revised Market Rules Enhanced E2E Market Processes Investor Education Minimum Technology Requirement for Operators 5/7/2013 The Nigerian Stock Exchange 15
Click Are You to edit Tapping Master These title Building style Blocks? ASEM Launch ETFs Issuers Portal 5/7/2013 The Nigerian Stock Exchange 16
Click Next to Steps edit Master title style With the spotlight brightly on Africa, if there is one destination to consider in the continent, that destination must be NIGERIA. You and your organisation must identify opportunities to tap now!!! 5/7/2013 The Nigerian Stock Exchange 17
Click Tappers to edit Delight Master (2) title style 5/7/2013 The Nigerian Stock Exchange 18
Click Opportunities to edit Master Abound title style 5/7/2013 The Nigerian Stock Exchange 19
Click to edit Master title style Planned Outcome of Successful Tapping A capital market that lives up to its true potential in 5 years time, achieving $1Trillion capitalisation, and providing real opportunities for Nigerians and International investors to create and grow their wealth in a sustainable manner through active participation in the growth of the country The Future is Bright The Future is NIGERIA 03/11/2011 The Nigerian Stock Exchange 20
Click to edit Master title style Thank You Stock Exchange House 2-4 Customs Street P.O. Box 2457, Marina Lagos Island, Lagos, Nigeria abajomo@nse.com.ng