Stock exchange loses $30bn to crude oil slide

Oscar Onyema, chief executive officer of the Nigerian Stock Exchange (NSE), says the capital market lost over $30 billion in market capitalisation to global crude oil slide.

Onyema, who spoke at the NSE 2015 Market Recap and 2016 Outlook on Thursday in Lagos, said the amount was lost between June 2014 when the slide started and now.

He said other factors that contributed to the loss apart from the persistent oil fall were volatile foreign exchange, currency slide, macro-economic concerns and political risk.

Onyema said 2015 was uneasy for the global economy expected to have grown at 3.1 per cent against 3.4 per cent in 2014.

He listed the three biggest contributors to the global slowdown as normalisation of monetary policy by the US Federal Reserve; slump in commodity prices and slowdown in China.

According to him, the global economy is poised for moderate economic growth in 2016.

Onyema said emerging markets witnessed recession amid weakening oil and other commodity prices.

He said the nation’s economy grew by four per cent in 2015 in spite of weak emerging market growth rates, coupled with domestic security challenges, declining oil prices and volatile currency trend.

This, he said, illustrated the country’s resilience, saying the need for state-owned enterprises to kick-start activities in the market and free cash for other things.

Onyema said the development would give Nigerians opportunities to have ownership stake in the enterprises.

He added that NSE bond market witnessed increased activities in 2015, with corporate organisations raising the sum of N112 billion or 562 million dollars in the debt market.

Onyema said the federal and state governments raised N76.5 billion and N35.8 billion in debt capital respectively.

He said the exchange was committed to ensuring that it provided various classes of products that would enable investors to create well diversified portfolios of uncorrelated assets classes.