PricewaterhouseCoopers (PwC) says the macroeconomic instability in Nigeria, caused by the COVID-19 pandemic and volatility in commodity prices, has made investors and issuers lose confidence in the domestic equities market.
This was contained in its ‘Nigerian capital markets update- September 2020’ report. “Macroeconomic instability continues to fuel investor and issuer apathy in the equities market as no initial public offering (IPO) has been recorded throughout the year,” PwC said.
The report, however, showed that the domestic equities market, which is the Nigerian Stock Exchange (NSE), is gradually recovering from the impact of the COVID-19 pandemic but in a very slow manner.
Meanwhile, PwC said the NSE witnessed some significant primary market activities within the year. It made reference to the International Breweries which raised N164.4 billion in March 2020, “the largest rights issue to date”; and BUA Cement listing, on the NSE. “BUA Cement attracted a valuation of N1.18 trillion, making it the third largest company on the NSE as at listing date.”
PwC said: “We expect a quiet primary market activity in the short term given the current macroeconomic concerns and blurry economic outlook” in Nigeria. It further said with the signing of the CAMA 2020 bill, demutualisation of the domestic equities market, NSE’s growth board, and new proposed rules for crowd funding activities by the Securities and Exchange Commission (SEC); more companies will be encouraged, especially start-ups, to explore the opportunity of accessing the capital market for long-term funding.