NSE Records 8% Revenue Decline
The Nigerian Stock Exchange has reported an eight per cent decline in revenue for the financial year ended December 31 2018.
The Chief Executive Officer, NSE, Mr Oscar Onyema, while speaking at the 58th Annual General Meeting of the Exchange in Lagos on Monday, said the decline in revenue to N7.67bn was because investors sought more guaranteed investment assets in the face of uncertainty.
An analysis of the financial statement showed that the revenue dropped from N8.30bn in 2017 to N7.67bn in 2018, while the surplus for the year dropped to N2.70bn from N3.79bn in 2017.
Onyema stated that the NSE demonstrated resilience in the face of a challenging operating environment.
He said the listings revenue stream was the most impacted as it fell by 21 per cent to N1.4bn.
Onyema said, “Influenced by the capital market trends within the period, transaction fees also declined to N3.3bn, a 13 per cent drop from last year.
“The balance sheet remained strong with a nine per cent growth in total assets as the group closed 2018 with total assets of N29.1bn, with approximately N4.1bn (14 per cent) held in liquid assets and an accumulated fund of N25.9bn to close the year with a sound liquidity position and strong balance sheet.”
According to him, the exchange witnessed a 47.6 per cent increase in foreign outflows of N642.65bn, compared with N435.31bn in the corresponding period in 2017.
He attributed the development to flight to quality by foreign investors to higher-yielding assets with lower risks in developed countries.
Onyema noted that the situation was intensified by the political risks associated with the presidential elections, which held in February.
He stated that the Federal Government during the period borrowed N1.2tn to finance fiscal and infrastructure deficits.
He said, “State governments and corporates raised a total of N157bn from the NSE during the period under review. We believe this level of activity validates our position as a competitive capital-raising platform for both business and government issuers to finance various economic activities.”
Onyema stated that the NSE future revenues and net incomes would continue to be influenced by key domestic and international market forces such as pricing, product features and regulatory changes.
The President of the National Council, NSE, Otunba Abimbola Ogunbanjo, said in line with global markets, the equities market experienced a decline in 2018.
He noted that the trend, however, was counterbalanced by the NSE’s delivery of key initiatives for the development of the capital market.
Ogunbanjo said, “We expanded our focus on retail investment, positioning the Exchange to deploy innovative and agile smart products and services. We also made significant progress with the demutualisation process, with the bill now signed into law and assented to by the President.
“The successful completion of this project will ultimately strengthen our market as a significant driver of socio-economic development.”
Ogunbanjo added that the NSE would continue to capitalise on new opportunities, take advantage of recent technological disruptions and seek corporate partnerships to maintain a fair and orderly market while delivering sustainable values to its customers and stakeholders.
