The federal government will embark on a lot of domestic borrowings to finance the budget due to the impact of the COVID-19 pandemic.
Oscar Onyema, chief executive officer, Nigerian Stock Exchange (NSE), said the government will shift away from Eurobonds to domestic borrowings with significant emphasis on fixed income. He said the shift to domestic borrowings would lead to increased activities in the fixed income market as markets and companies adjust to the effect of the COVID-19 pandemic.
“We expect government and corporate companies to raise capital using different platforms, and capital market is one of it,” Onyema said.
He said the market will not witness any initial public offering in the near-time due to the narrative around COVID-19.
Speaking on the topic: “Impact of COVID on African financial markets”, Onyema said COVID had affected government, businesses and individuals in so many ways. He noted that the Exchange witnessed a lot of volatility with largest single day loss of five per cent at the wake of the coronavirus pandemic.
He said that a lot of foreign investors exited the market in February when the first case of coronavirus was reported in Nigeria.
Onyema said the Exchange, which emerged as the highest stock market in terms of return having finished with 7.5 per growth in January, slid into negative territory due to COVID-19.
Speaking yesterday at a virtual event to mark the 10th anniversary of Brand Africa 100, he said the market had showed some tremendous recovering across all the asset classes.
The NSE boss said investors were redirecting their investment into the capital market that offers higher returns due to foreign exchange challenges and fall in crude oil price.
Chief Executive Officer, Nairobi Securities Exchange, Mr. Geoffrey Odundo, said the Kenyan stock market had experienced heavy down selling in March due to the pandemic. He said the Exchange transmitted to full remote trading environment to ensure access to the market from anywhere.
“We gave quoted companies more time to file their results and as well allowed companies to do their annual general meetings electronically,” Odundo said.
He noted that international investors were still active in the market but at lower level.
Odundo said Kenyan Government, just like others, announced various incentives and stimulus to support Small and Medium Enterprises (SMEs).
Chief Executive Officer, Johannesburg Stock Exchange, Dr Leila Fourie, said COVID-19 caused a lot of outflow from the market.
Fourie said that whenever there was crisis, investors would take flight to safety.
“It will take a long time for companies to raise capital from the market due to the pandemic. We are still in lockdown in South Africa,” Fourie said.
Group Chief Brand & Corporate Communications Officer, Dangote Group, Mr Anthony Chiejina, described the pandemic as a passing phase.
Speaking on ‘Building brands in Africa post COVID’, Chiejina said Africans should reinforce their brands by telling their own stories.
He said such stories should lift hope rather than scare the populace.
Chief Marketing Officer, Google Africa, Mr Mzamo Masito, said the company would be helpful to SMEs and people who lost their jobs due to the pandemic.
Masito said brands that help people and businesses to restart and recover would remain important in their lives.
He noted that Google would continue to provide relevant and accurate information to what people need.
Chief Customer Officer, Safaricom, Sylvia Mulinge, said brands must chase customers because they choose the brands of their choice.
“Every brand needs to know the critical thing required by the consumers to make themselves relevant in their life,” Mulinge stated.