Nigerian Capital Market Update

pwc Nigerian Capital Market Update - September 2020 Overview Equities market Debt market Commercial papers As witnessed in the global markets, the Nigerian equities market is gradually recovering from the impact of COVID-19, albeit more slowly. Macroeconomic instability continues to fuel investor and issuer apathy in the equities market as no IPO has been recorded through out the year. Meanwhile, the market witnessed a some significant primary market activities within the year. The largest rights issue to date on the Nigerian Stock Exchange (NSE) was recorded within the year by International Breweries Plc, raising N164.4 billion in March 2020. Proceeds from the rights offer were used to part-refinance the company's existing debt in the bid to optimize the capital structure. The market also saw the listing of BUA Cement Plc, a product of the merger agreement between OBU Cement and Cement Company of Northern Nigeria (CCNN) which was concluded in January 2020. BUA Cement Plc attracted a valuation of N1.18 trillion, making it the third largest company on the NSE as at listing date. As part of initiatives aimed at attracting fast growth companies and startups to the capital market, the NSE launched the Growth Board earlier in the year. The Growth Board aims to address the shortcomings of the Alternative Securities Market (ASM) by offering more flexible listing options, relaxed eligibility requirement, and less regulatory burden in terms of post-listing obligations. For instance, companies with market capitalization of as low as N50 million with a minimum of 25 shareholders could be eligible to list its shares on the Growth Board. In the similar vein, the NSE recently released a draft regulatory framework for the listing of special purpose acquisition companies (SPACS) in Nigeria. This will further expand the funding options available to start-ups and fast growth companies through the capital market, and create an avenue for listing through a reverse merger. It will also provide a regulated and 'shareholder-friendly' structure for retail investors to invest in start-ups thereby having a reduced risk perception. Nigerian capital market: summary of major events year-to-date What lies ahead About us Nigerian capital market update - September 2020 PwC NSE ASI vs global indices, 2014 - June 2020 90.00% 70.00% 50.00% 30.00% 10.00% ستيل 42.3% -10.00% -6.2% -8.8% -30.00% -16.1% -17.4% 2014 2015 2016 2017 -17.8% 2018 -14.6% 2019 H1 2020 ■ S&P 500 FTSE 100 ■ Hang Seng > NSE ASI ■FTSE SA ■Nairobi ASI ■ EGX 30 September 2020 4

View entire presentation