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Friday, March 31, 2023

Nigeria Bourse CEO Doesn’t See Central Bank Normalising Rates Soon

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The Central Bank of Nigeria (CBN) will not move quickly to normalize historically low interest rates which is positive for equities, according to the Nigerian Stock Exchange (NSE), Chief Executive Officer, Oscar Onyema.

“The CBN intends to see policy pronouncements to its full course and we will not see immediate reversal of low interest rates in the short to medium term,” Onyema said yesterday at a 2021 economic outlook conference held by the NSE.

Equity markets are expected to rally further in 2021 on account of the low bond yields. Nigerian government benchmark 10 year bond yields due 2030 traded at 8.35 percent as at Tuesday January 19th, according to FMDQ data. Nigerian stocks rose some 50 percent in 2020 as a result of low bond yields and investors hunt for alpha.

“Low yields will also support refinancing, new issuances and significant activities in the capital markets, as firms rebalance their debt and equity capital structure,” Onyema said.

Onyema who is set to step down this year as the NSE head, said the demutualization process of the bourse was on course with the NGX group to be listed once Securities and Exchange Commission (SEC) approval is received.

“A listing by introduction will be done as part of the demutualization, with a potential initial public offering or IPO down the line to get the shares of the group to be more widely held,” Onyema said.

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