Nigerian Capital Market Update
pwc
Nigerian Capital Market Update - September 2020
Overview
Equities market
Debt market
In H1 2020, the twin combination of the outbreak of the novel
coronavirus (COVID-19) and volatility in commodity prices impacted
the Nigerian economy as well as other emerging economies.
According to the Nigerian Bureau of Statistics (NBS), Nigeria's gross
domestic product (GDP) contracted by -6.1% year-on-year in Q2 2020
and by -8.22% when compared to the GDP growth rate of 2.12%
recorded in Q2 2019.
The sectoral growth recorded in the agriculture (1.58%), finance and
insurance (18.49%), and information and telecommunications sectors
(15.09%) in Q2 2020 could not level out the decline recorded in other
sectors due to the nationwide lockdown. Expectedly, the transportation
& storage and accommodation & food services sectors suffered the
worst contraction of -49.2% and -40.19%, respectively.
Crude oil price volatility has continued to put pressure on foreign
exchange stability which has necessitated several exchange rate
adjustments by the Central Bank of Nigeria from N307/$1 in March
2020 to 380/$1 in August 2020, indicating a naira devaluation by
23.8%. Similarly, headline inflation rate has been on the rise, from
11.22% in June 2019 to 12.13% in January 2020 and 12.56% as at
June 2020.
Macro-economic indices and forecasts portray rather low level of
investors' confidence in the domestic investment climate as foreign
direct investment (FDI) and foreign portfolio investments (FPI) plunged
33.41% and 91.14% respectively, year-on-year in Q2 2020.
Stock market returns, measured by Nigerian Stock Exchange All
Share Index (NSE ASI), dipped by 8.8% as at H1 2020 year-to-date
from 26,842.07 in December 2019 to close at 24,479.22 in June 2020.
Commercial papers
Nigerian capital market: summary
of major events year-to-date
What lies ahead
About us
Nigerian capital market update - September 2020
PwC
$'billions
$11.4
$4.7
Foreign portfolio investment, 2014 - June 2020
$8.5
$13.4
$3.8
$3.6
$3.2
$2.4
$2.4
$1.9
$1.0
$0.8 $0.6
$0.9
$1.0
$1.0
$0.4$0.6
$0.5
$0.7 $0.2
2014
2015
2016
2017
2018
2019
H2 2020
■ Equity
Bonds
■Money market instruments
Source: National Bureau of Statistics, Nigeria
September 2020
3View entire presentation