Stock Exchange makes N3.8 billion record high profit

Trading floor of NSE, Lagos

The emergence of the Nigerian Stock Exchange (NSE) as the third best performing stock in the world last year has impacted on its performance for the 2017 financial year, resulting to an operating surplus after tax or Profit After Tax (PAT) of N3.79 billion.

The NSE made this known at the presentation of its results for the year ended December 31, 2017 during the 57th yearly general meeting held in Lagos on Thursday.

Specifically, the exchange’s operating surplus after tax represents a growth 13,712 per cent increase over 2016 modest operating surplus after tax of N27.45 million, indicating the highest operating surpluses recorded in the last five years.

The results showed a total income of N8.30 billion for the Group and N3.82 billion surplus before tax for the year ended 31 December 2017. This represents an 86 per cent increase in gross earnings when compared to the N4.46 billion achieved in 2016. Surplus before tax grew by 5,629 per cent in the same period.

NSE’s All-Share Index grew by 42.3 per cent to emerge as the third best performing stock market in the world, which was characterised by a solid financial performance, growth in market activities and renewed interest in the Nigerian capital market.

The Exchange Group comprises four subsidiary companies- Naira Properties Limited, Coral Properties Plc, NSE Consult Limited and NSE Nominees Limited.

The Exchange also has interests in NG Clearing Limited and Central Securities Clearing System (CSCS) Plc as joint venture and associate company respectively.

The President of the Exchange, Abimbola Ogunbanjo, said that the year 2017 saw a pick-up in global growth, driven by improvements in global oil prices, sustained growth in investment and trade and stronger consumer confidence.

He added that buoyed by improvements in the macro environment, the NSE’s management has successfully executed a number of ambitious operational and strategic initiatives, saying that demutualisation of the Exchange remained a key strategic priority as a critical precursor to a more dynamic, open and efficient capital market.

According to Ogunbanjo, NSE has deployed a new four-year corporate strategy that will reposition us as a more investor friendly and customer centric exchange hub in Africa.

“With this new strategy, we are poised to deliver superior performance for our multi-faceted stakeholders especially issuers and investors who continue to access our market to raise and save capital respectively,” he said.

Also, the Chief Executive Officer of NSE, Oscar Onyema, said the positive performance, amid significant headwinds witnessed over the past two years, affirms the resilience of the market and its potential as a catalyst of economic growth in Nigeria and the hub for Africa.

According to Onyema, focus on executing its robust strategy of cost efficiency, products and revenue diversification, as well as innovative and improved operational delivery, underpins the improved performance.

He added that the NSE is on track to become a more agile and flexible demutualised securities exchange, adding that the exchange remains hopeful that the demutualisation bill will be signed into law in this year.

Manufacturers seek government intervention as average lending rate hits 22.8%

“A survey of manufacturers by MAN shows that cost of lending to the manufacturing sector stood at 23.05 percent in the second half of 2017 which is almost the same figure with 23.3 percent recorded in the corresponding period of 2016. However, it increased by 0.37 percentage point when compared with 22.65 percent recorded in the preceding half”, MAN explained in its H2 report.

The Minister of State for Industry, Trade and Investment, Hajia Aisha Abubakar had at a forum in Ogun State said plans were underway to ensure that from first quarter 2018, government will begin implementation on the reduction of interest rate for local manufacturers in order to tackle the issues of rising interest rate in the sector.According to her, “As government, it is our responsibility to continue to provide an enabling environment to the sectors where you are involved. We will go back and look at the sectors and see what the aggregate is for that sector for us to be able to come up with the aggregate to bear in that sector.”

MAN President, Dr Frank Jacobs however urged government to offer effective and beneficial stimulus to interest rate sensitive sectors to further propel growth as the economy is still largely static and fragile and urgently requires stimulus.He added that efforts should be made to consult with the Monetary Policy Committee to find ways and means of lowering interest rate to prevent the economy from being chocked and the rate of recovery being slowed down.

On its part, the Lagos Chamber of Commerce and Industry (LCCI) noted that access to and cost of fund in Nigeria has been and remains a big issue for many domestic investors.LCCI President, Babatunde Ruwase said: “With commercial bank lending rate at between 20-35%, depending on the borrower and other factors such as acceptability of collateral, it is very difficult to successfully access fund by the private sector especially the SMEs.

“We note the efforts of government through CBN and the Bank of Industry (BOI) to extend intervention funds to operators. “However, the range of beneficiaries and economic wide impact of government intervention funds remain very limited. Investors in many sectors cannot finance projects profitably at an interest rate above 10 per cent. These sectors are majorly agriculture, real estate, solid minerals among others”.