The reforms in the foreign exchange market have improved valuation transparency in companies, which enabled more foreign investors to invest in the economy, the President of the Association of Issuing Houses of Nigeria, ‘Kemi Awodein, has said.
She spoke during the recent AIHN Annual General Meeting in Lagos.
Awodein explained that the several successful transactions facilitated within the year, including Heineken’s $24bn acquisition of a controlling stake in Nigerian Breweries and Sahara Group’s $1bn purchase of Eabin Power, were boosted by the forex reforms.
“These deals were facilitated by the restructuring of the FX market, which improved valuation transparency for foreign investors,” she said.
Awodein said the ongoing recapitalisation of banks “has also supported growth in the equities market, which is a good development for the economy.”
Two key economic reforms of President Bola Tinubu’s administration were the removal of fuel subsidies and the unification of the segments of the foreign exchange market.
She said that these reforms had a profound impact on the overall financial landscape, enhancing foreign investor confidence and increasing liquidity in the market.
“These reforms, alongside broader macroeconomic adjustments, have shaped investment banking strategies, enabling new opportunities in capital raising and mergers and acquisition activities.
“The prominent transactions are Seplat Energy’s $650m bond issuance, aimed at expanding its energy operations, and Airtel Africa’s $500m capital raise, which was used to enhance telecommunications infrastructure. These initiatives were made more feasible by the improved economic environment following the reforms,” the AIHN president said.
According to her, improvements in transaction processing and time-to-market cannot be overemphasised and represent positive developments in the market.
Also, the AGM provided an opportunity for the AIHN executives and members to receive the association’s audited financial statements for the year ended December 31, 2023, together with reports of directors and auditors, re-appoint auditors, authorise the directors to fix remuneration of auditors and elect Taiwo Olatunji as the Secretary of Treasury.
The account statement showed the association recorded N86.56m income in the 2023 financial year, an improvement from the N85.41m it achieved in the corresponding period of 2022.
Speaking on the Nigeria Exchange Limited, Awodein said its All-Share Index as of half year recorded an impressive return of 33.8 per cent, materially outperforming its African peers (Ghana Stock Exchange: +22.3 per cent; Nairobi Exchange: +18.9 per cent and Uganda Stock Exchange: 17.9 per cent.
In the second half of 2024, she anticipates the drivers of the equities market would be the “Banking sector recapitalisation activities, completion of the Dangote Refinery, corporate actions, and the potential return of foreign portfolio investors.
“The banking recapitalisation has invariably created an opportunity for the growth of real investment and a deeper capital market. I look forward to furthering our discussions with other strategic market stakeholders such as the Central Bank of Nigeria, the Nigerian Exchange Limited, NASD Plc, Central Securities Clearing System, FMDQ Plc, as well as other capital market trade groups.”
