On account of economic slowdown and investment apathy towards stock market investing and trading, volumes and value slumped at the 13 branch offices of the Nigerian Stock Exchange (NSE) by 28 percent and 34 percent, respectively, in 10 months – January to October 2015.
Oscar Onyema, CEO, NSE, speaking yesterday at the zonal annual general meeting of the Kano/Kaduna branch of the stock exchange, admitted that 2015 had been challenging for the Nigerian stock market, especially as the unwillingness of stockbrokers to carry out trading activities from branches of the NSE continued to affect the performance of the stock market.
Onyema raised concerns that evidence had shown that despite the fact that some firms had resident stockbrokers in some of these offices, they were not allowed to trade.
Between January and October, the 13 NSE branch offices pulled a cumulative trade volume of 1,250,545,990, representing just 1.68 percent share of the entire nation’s market of 74,475,921,464. The value was recorded at N10,150,821,217.50, about 1.30 percent of the entire market share of N780,651,336,453.21 and reported in 40,544 deals as against that in the entire market at 770,099.
“It has become more worrisome when we have evidence that some stockbrokers have resident stockbrokers in some of these offices, yet are not allowed to trade.
“As a result, a large portion of the investors funds realised from outside Lagos are transferred to the head office trading book.
“While we agree that the funds were still deployed to stock trading, the reality is that branch offices’ trading floors are not active while maintenance fees are incurred daily,” Onyema said at the AGM that held in Abuja.
He pointed to the unwillingness of stockbrokers to trade from the branch trading floors as shown in the breakdown of trading activity, which indicated that within the period, all the branch offices had just 28 active stock-broking firms.
The NSE boss said there was need to increase the bandwidth of some branch offices to increase the trade processing speed, regretting that all but Abuja and Port Harcourt had adequate network bandwidth.
The NSE is currently taking steps to make the branches more attractive, he said, adding that plans have been concluded to relocate those branches in obscured location to better location.
For instance, the Port Harcourt branch would be relocated before the end of this year, he said, and Kano branch would follow suit by next year.
In the area of performance, he said the Kano/Kaduna branch performance was affected by the lull in the economy.
He said: “The branch performed very well with regards to trading. However, the quantum of trading was much lower than 2013 and as you know 2014 was a difficult year especially towards the end of the year when we had oil shocks.
“2014 is a tough year and 2015 seems to be a tougher year not only for the exchange but for the economy and this is why we have some what we have in the report and we hope that as things turn around, we will improve.
“The northern part of the country has been challenged with security and so we could not do enough financial literacy that we ought to.”
He also said the volatility in the stock market has impacted negatively on investor confidence.
