By Chinwendu Obienyi
To ensure a healthy stock market, the Nigerian Exchange (NGX) Limited has said it would now place its focus on companies with weak corporate governance (CG) standards and delist companies who fail to meet its requirements.
Its CEO, Temi Popoola, stated this during the exchange annual 2021 Market Recap and Outlook for 2022 in collaboration with Rennaisance Capital which held virtually in Lagos recently.
Speaking on the performance of the market in 2021, Popoola said that general global economic recovery and recovery in corporate earnings spurred major indices around the world to end the year in a positive note in which the Nigerian equities market closed in the positive territory (6.07 per cent) in 2021.
He revealed that while the NGX market capitalisation grew by N1.94 trillion, the exchange recorded a decline in market turnover, which fell by 10.82 per cent, from N1.03 trillion in 2020 to N916 billion in 2021 which was in line with global trends of liquidity drought in global markets due to the COVID-19 pandemic.
“The fixed income market segment grew much significantly as market cap grew by 12.81 per cent to N19.74 trillion in 2021 and there was an uptick in turnover value to N3.52 billion representing an increase of 158.19 per cent coming from a low base. For Securities Lending, the total value of securities borrowed/lent in 2021 grew to N513.10 million up from N95.18 million in 2020 and N340,000 in 2019”, he said.
Popoola, while unveiling that the NGX strategy for 2022, said the exchange would keep building on the momentum of its digital journey across value chains, adding that there maight be digitalised listings and digitisation of its product or offerings.
He noted that this is important because the belly of the Nigerian demography is huge and the exchange currently represented by older people, needs the young generation and to bridge that gap, technology is needed and revealed that lots of work would be on experience, retail, integration of its market to financial service players especially banks.
While expressing confidence that few listings will take place on the platform of the NGX, Popoola said the exchange is looking at diversifying the types of listings across food, power, agriculture, hence having representation of GDP on the nation’s bourse.
“This year, the board and management of the NGX will be looking at the quality of companies that we have listed. Yes we want listings but as much as we want these listings, sometimes it just might be the right thing to delist some companies voluntarily and that is to make sure we increase the level of governance as investors’ confidence on our platform is key. Also, those who fail to meet our requirements might also face delisting and all these are aimed to have a healthier market”, he said.