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African Stock Exchanges’ Potential to Support Region’s Economic Development Mapped Out in New Focus Report

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2 years ago

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Stock bull - Investors King

A new focus report, produced by Oxford Business Group (OBG) with the African Securities Exchanges Association (ASEA), explores efforts under way to integrate the region’s stock markets, which is gathering pace on the back of growing awareness among key players of the need to build resilience and diversify the investor base.

Titled “African Stock Exchanges”, the wide-ranging study provides detailed analysis of the trends, opportunities and challenges evident across the continent’s financial sector, and its capital markets in particular, in an easy-to-navigate and accessible format, supported by key data and infographics.

The focus report shines a spotlight on the African Exchanges Linkages Project (AELP), which aims to connect stock exchanges regionally and foster both investment and trade, following a pilot phase that involves seven leading exchanges.

The AELP is a joint initiative of ASEA and the African Development Bank, funded by the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund, one of the Bank’s bilateral funds. The project is expected to increase the depth and liquidity of the region’s capital markets, while benefiting from anticipated heightened trade activity under the African Continental Free Trade Area agreement.

The report also tracks the technological advances that have been made across the continent’s larger exchanges and are now being replicated in key smaller markets. The benefits digital solutions offer, which include facilitating the delivery of a larger range of products and services quicker and at a lower cost, are a key focus.

In addition, the report considers the impact on African exchanges of rising demand for more sustainable investment products, analysing moves under way at some of the region’s larger markets, in particular, to sharpen the focus on environmental, social and governance reporting.

Other topical issues looked at include the steps being taken by governments across the continent to improve the regulatory environment, which will be key in positioning exchanges to play a major part in supporting the region’s economic development.

The study also examines the challenges that several of the regional exchanges face in their expansion efforts, which range from limited liquidity and comparatively few listings to minimal participation from retail investors.

The report features 16 case studies, which chart the development of key exchanges across the continent, alongside contributions from a broad range of business leaders.

It also contains a wide-ranging foreword by Félix Edoh Kossi Amenounve, ASEA President,as well as CEO of Bourse Régionale des Valeurs Mobilières (BRVM), in which he discusses the steps needed to increase the part played by the region’s capital markets in Africa’s economic transformation.

“For the most part, African stock exchanges remain modest in size and liquidity, and therefore their contribution to economic development continues to be marginal,” he said. “There is a need to encourage enthusiasm in African securities and address the lack of depth in the market to support major operations; we must supply stock exchanges with more listed companies and boost demand for securities by developing institutional savings mechanisms and mobilising citizens’ savings through concerted efforts at enhancing financial literacy.”

Commenting after the launch, Karine Loehman, OBG’s Managing Director for Africa, said that while exchanges had felt the weight of the pandemic, a recovery was now taking shape, buoyed by advancements in their operating models and an awareness amongst investors of the region’s potential.

“Near-term challenges remain an issue, in part due to the economic situation of individual markets and the impact of external headwinds,” Loehman said. “However, there is a growing realisation among governments, regulators and the international business community of the potential that stock exchanges offer African countries to unlock capital and galvanise intra-regional growth at a time when the continent is poised for a period of major development.”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Nigerian Exchange Limited

Shares Reconstruction: Transcorp Lists Newly Reconstructed 10,161,997,574 Units of Ordinary Shares

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1 day ago

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November 4, 2024

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Transcorp hotel

Transnational Corporation Plc (Transcorp) has delisted 40,647,990,293 shares from the Nigerian Exchange Limited on Monday and listed a newly reconstructed issued share capital of 10,161,997,574 ordinary shares.

In a statement seen by Investors King, the company said “We refer to our market bulletin with reference number NGXREG/IRD/MB73/24/10/10, dated 10 October 2024, wherein the Market was notified that trading in the shares of Transnational Corporation Plc (Transcorp or the Company) was placed on suspension effective, Thursday, 10 October 2024, in preparation for the share reconstruction of the Company’s Issued shares.

“The Market is hereby notified that the entire 40,647,990,293 issued shares of Transcorp were delisted from the Daily Official List of Nigerian Exchange Limited (NGX) on Monday, 28 October 2024, while the newly reconstructed issued share capital of 10,161,997,574 ordinary shares of 50 Kobo each were also today, listed on the Daily Official List of NGX at N44.2 per share.

“The delisting of 40,647,990,293 ordinary shares and listing of 10,161,997,574 ordinary shares on NGX is pursuant to the approval received from the Company’s shareholders at its Annual General Meeting of 27 May 2024 and the no-objection received from the Securities and Exchange Commission.

“Consequently, following the completion of the share reconstruction, the suspension placed on the securities of the Company has been lifted.”

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Nigerian Exchange Limited

Transcorp Gains 314.03% Last Week Despite NGX Closing the Red

Published

1 day ago

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November 4, 2024

By

stock bear - Investors King

Transnational Corporation Plc (Transcorp), Nigeria’s largest listed conglomerate, gained N34.70 or 313.03% a share last week to close at N45.75 a unit after the company’s unaudited financial statement for the third quarter showed 352% year-on-year growth in profit before tax to N34.566 billion.

During the week, investors on the floor of the Nigerian Exchange Limited (NGX) transacted 2.717 billion shares worth N54.632 billion in 46,848 deals, against a total of 2.142 billion shares valued at N85.946 billion that exchanged hands in 41,217 deals in the previous week.

The Financial Services Industry led the activity chart with a combined 1.821 billion shares valued at N28.958 billion traded in 20,173 deals, therefore, contributing 67.01% and 53.01% to the total equity turnover volume and value, respectively.

The ICT Industry followed with 389.848 million shares worth N6.560 billion in 2,515 deals. In third place was the Conglomerates Industry with a turnover of 160.993 million shares worth N4.746 billion in 3,623 deals.

Fidelity Bank Plc, Chams Holding Company Plc and United Bank for Africa Plc accounted for 1.225 billion shares worth N17.721 billion in 4,912 deals and contributed 45.10% and 32.44% to the total equity turnover volume and value, respectively.

The NGX All-Share index closed the week in the red at 97,432.02 index points, a 2.03% decline from 99,448.91 index points recorded in the previous week. The Exchange year-to-date return moderated to 30.30%.

Also, the market capitalization of listed equities dipped by the same 2.03% from N60.261 trillion to N59.039 trillion.

Similarly, all other indices finished lower with the exception of NGX Banking, NGX AFR Bank Value, NGX AFR Div Yield, NGX MERI Growth, NGX MERI Value, NGX Oil & Gas and NGX Growth which appreciated by 0.19%, 1.76%, 1.52%, 0.16%, 0.48%, 1.15%, and 0.07% respectively while the NGX ASeM index closed flat.

Thirty-nine equities appreciated in price during the week lower than fifty-eight equities in the previous week. Forty-five equities depreciated in price higher than eighteen in the previous week, while sixty-eight equities remained unchanged, lower than seventy-six recorded in the previous week.

 

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Nigerian Exchange Limited

Naira Depreciation and High Interest Rates Force Market Slowdown, Experts Say

Published

2 weeks ago

on

October 21, 2024

By

stock - Investors King

Stockbrokers and investors have abandoned the equity market due to the Naira volatility, lack of market drive towards the end of the year,  and the high interest rate in Nigeria.

A long-time investor, David Adonri explained that the volume of trade usually drops towards the end of the year but the market normalises in January.

With the persistent drop in the value of the Nigerian Naira against foreign currencies, investors are wary of unfavourable currency conversion.

“The equity market reacts to so many things. The depreciation of the naira, which is around N1,700, of course, would impact the market. The foreign exchange position can make people exit the market and convert to hard currency, which is stronger, possibly to come back to the market when they see an improved currency level. That is what we call carry-over trade,” Adonri said.

“We also have the hike in the interest rate, which also causes financial assets to migrate away from the capital market,” Adonri added.

“Third, we are in the period of the year, where seasonally, the market is a little bit down because there is nothing specific to drive the market like full-year results or half-year dividends and so on. So we slide to a low tempo from September up to November until after Christmas the market starts trending up again,” he further stated.

According to a report by the Nigerian Exchange Group (NGX), equity investment transactions dropped in Q3, 2024 compared to the previous quarter of the year.

In the same vein, the National Bureau of Statistics (NBS) reported that capital importation showed that investors shifted from equity investment to portfolio investment.

The portfolio investment includes equity, bonds, and money market instruments.

With the recent shift, the portfolio investment made a 10.37 percent increase amounting to a $106.85 million gain from the N1.03 billion total capital inflow.

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