Presentation - The Nigerian Stock Exchange

Click to edit Master title style2013 MARKET OUTLOOKPresented byOscar N. OnyemaCEOJanuary 17, 2013

|Click Outline to edit Master title style• Summary• 2012 Market Review Macro Economic Performance Capital Market Snapshot 2012 Achievements• 2013 Outlook Projections 2013 Key Objectives• Conclusion• Q&ARev 4/23/2013The Nigerian Stock Exchange 2

|Click Summary to edit Master title style• The Nigerian Stock Exchange (NSE) was one of the top performing exchanges globally in 2012.• The NSE All Share Index (ASI) grew 35.45%, and average daily turnover for equities was N2.65 billion($17.07 million), up 4.74%.• The capitalization of listed equities grew 37.36% from N6.54 ($41.87 billion) to N8.98 trillion ($57.83billion).• The year closed with two (2) new equity listings on the Main Board and 10 new bond listings.• In 2012, the NSE executed a number of key strategic initiatives, among which were Primary MarketMaking, a suite of value-added services (X-value), and investments in two alternative tradingplatforms.• The outlook for 2013 is largely positive for both the Nigerian economy and the Nigerian capital marketas changes implemented in 2012 begin to crystallize in 2013.• By the end of 2013, the NSE expects to be well-positioned to adapt our business to meet the needs ofour clients, and to enable the Nigerian capital market absorb the forces of change reshaping globalfinancial markets and the global exchange landscape.Rev 4/23/2013 The Nigerian Stock Exchange 3

|Click Nigeria to edit in 2012 Master title styleHighlights• Government policy on fuel subsidy in January 2012 stalledeconomic activities in the first quarter• GDP growth - 6.48% (Q3 2012)• Double-digit inflation - 12.3% (Nov 2012)• Double-digit lending rates - MPR of 12% (Nov 2012)• The economy decreased it’s dependency on Oil and Gas asa percentage of GDP (13.42% contribution in Q3 from15.80% in Q1)• Agriculture’s contribution to GDP increased from 34.47% inQ1 to 42.62% in Q3• Nigerian government bonds included in the JP MorganGovernment Bond Index-Emerging Markets (GBI-EM)Rev 4/23/2013The Nigerian Stock Exchange4

|Click Nigerian to edit Industry Master Sector title style PerformanceNSE INDEX PERFORMANCEBloomberg NSE 3044.63%NSE Lotus Islamic44.21%Bloomberg NSE Consumer Goods42.29%NSE All Share Index35.45%Bloomberg NSE Banking23.84%Bloomberg NSE Insurance-17.45%Bloomberg NSE Oil/Gas-30.53%-50% -30% -10% 10% 30% 50%Rev 4/23/2013 The Nigerian Stock Exchange 5

Nairobi ASINigeria ASIGhana Comp.EGX 100FTSE/JSE ASIHANG SENGWIG20NASDAQ Comp.S&P 500IBOVESPADJIAFTSE 100FTSE AIMSEMDEXMASI|Click Global to Exchange edit Master Performance title style50%2012 Key Index Performance40%38.72%35.45%26.61% 24.46% 22.71% 20.70%17.72%15.91%13.41%7.39% 7.26% 5.84%30%20%10%0%0.56%-10%-20%-8.00%-14.46%Rev 4/23/2013 The Nigerian Stock Exchange 6

Millions|Click Market to edit Snapshot Master & title FPI style2011 2012 % ChangeTotal Market CapitalizationN10.28 trillion$62.23 billionN14.80 trillion$95.32 billion43.97%FPI MARKET ACTIVITYEquities Market CapitalizationN6.54 trillion$41.87 billionN8.98 trillion$57.83 billion37.36%Bonds Market CapitalizationN3.74 trillion$23.94 billionN5.82 trillion$37.48 billion55.61%$8,000NSE All Share Index 20,730.63 28,078.81 35.45%Bloomberg NSE 30 Index 923.77 1,336.07 44.63%$6,643Bloomberg NSE Consumer Goods 589.60 838.97 42.29%Bloomberg NSE Banking Index 274.26 339.63 23.84%Bloomberg NSE Insurance Index 143.54 118.49 -17.45%$6,000$4,893$5,511$4,716Bloomberg NSE Oil/Gas Index 220.11 152.92 -30.53%NSE Lotus Islamic Index 1,226.74 1,769.07 44.21%Total Volume - Equities 82.30 billion 89.15 billion 8.32%$4,000$2,851$3,855Total Value (Turnover) - EquitiesN622.60 billion$3.99 billionN657.77 billion$4.24 billion5.65%$2,000Avg. Daily Volume - Equities 334.54 million 359.50 million 7.46%Avg. Daily Value (Turnover) - EquitiesN2.53 billion$16.20 millionN2.65 billion$17.07 million2.71%Turnover Ratio - Equities (%) 9.52 7.33 -23.00%No. of New Issues 11 12Value of New IssuesN1,810.39 billion$11.59 billionN195.36 billion$1.26 billion$02007 2008 2009 2010 2011 2012**All December figures not yet reported.Rev 4/23/2013 The Nigerian Stock Exchange 7

No. of Issues|Click Market to edit Snapshot Master title styleEQUITIES• Number of listed companies at the end of 2012decreased from 194 to 191.• Number of listed equities also declined to 198 from201.• Zero IPOs , two (2) new listings on the Main Board.• Four (4) companies delisted.• Three (3) banks delisted and relisted in compliancewith the holding company structure mandate by theCentral Bank of Nigeria (CBN).NUMBER OF NEW ISSUES (Bonds and Equities)131211109.09%12112011 2012HIGHLIGHTS• Total market for capitalization for equities and fixedincome securities increased 43.97% to N14.80 trillion($95.32 billion).% GROWTH IN MARKET CAPITALIZATIONMid Cap• Market capitalization for all listed equities on the MainBoard and on the Alternative Securities Market (ASeM)Large Caprose by 37.36%. Small Cap 9.59%39.70%43.78%0% 10% 20% 30% 40% 50%Small Cap Large Cap Mid CapRev 4/23/2013 The Nigerian Stock Exchange 8

|Click Market to edit Capitalization Master title by style SegmentMAIN BOARDASeM1%1%0% 2% 1% 0% 1% 1%AGRICULTURECONGLOMERATESCONST./REAL EST.27%CONSUMER GOODS32%FINANCIAL SERVICESHEALTHCAREICTINDUSTRIAL GOODSNATURAL RES.OIL AND GAS34%SERVICES57%1% 2% 0% 3%0%37%CONST./REAL EST.CONSUMER GOODSHEALTHCAREINDUSTRIAL GOODSNATURAL RES.OIL AND GASSERVICESBONDS6%24%CORPORATEBONDS/DEBENTURESGOVERNMENT BONDS-FEDERAL70%GOVERNMENT BONDS-STATE & LOCALRev 4/23/2013 The Nigerian Stock Exchange 9

NGN (=N= brillion)% of total value traded|Click Market to edit Snapshot Master (contd.) title styleTOTAL TURNOVER (N) - EQUITIES6706605.65%650640657.77TURNOVER HIGHLIGHTS• Total turnover was N657.77 billion ($4.24 billion).• Average daily turnover was also up 4.74% compared to-20.71% experienced in 2011.630620610600622.62011 2012• Turnover ratio for 2012 was 7.33% down 23.00% from2011 (9.52%).100%80%60%40%20%0%85% 84%15% 17%FPI CONTRIBUTION69% 64%31% 36%33%67%44%56%2007 2008 2009 2010 2011 2012*Foreign InvestorsLocal Investors*All December figures not yet reported.BONDS• Market capitalization of bonds soared 55.61% to N5.82trillion ($37.48 billion).• Seven (7) new State and Corporate bond issues, andthree (3) Federal Government bond issues.• The value of cash transactions for governmentbonds, fell for the third consecutive year by 11.14%, toN7.10 trillion ($45.73 billion).• Increased focus on Treasury bills (T-bills) in 2012; cashtransactions valued at N13.92 trillion ($89.65 billion), a28.75% increase over the previous yearRev 4/23/2013 The Nigerian Stock Exchange 10

|Click The Way to edit Forward Master title styleThe “Five Pillars”$1 Trillion Market Cap by 20165. First-rateinvestorprotectionprogrammes1. Targetedbusinessdevelopmentefforts2. Strongerregulatoryenvironment4. Growthenablingmarket3. 21 ststructurecenturytechnologiesRev 4/23/2013 The Nigerian Stock Exchange 11

Index Value|Click Results to of edit CollaborationMaster title style30,00025,000The year starts off slowdue to the removal ofthe fuel subsidy.In September, the NSElaunches its MarketMaking initiative with10 stockbroker firms.10.66%The market experiences agrowth of 10.66% to theend of the year followingthe implementation of theNSE’s 2012 key initiatives.20,000Market experiencedsteady growth asInvestors start returningto the market.15,000Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12Rev 4/23/2013 The Nigerian Stock Exchange 12

|Click 2012 to Achievementsedit Master title styleNSE PILLARSACHIEVEMENTSTargeted Business Development Efforts NSE Lotus Islamic Index Xvalue ServicesStrong Regulatory Environment New Listing Rules Broker TraX Tool X-Compliance Report X-Qual Report21st Century Technologies Strategies New Web Site X-Net VPN X-Gen Development Market DataGrowth-Enabling Market Structure Equity Primary Market Making Securities Lending and Short SellingFirst-Rate Investor Protection Programs Financial Literacy Investor Protection Fund LaunchMarket Development and Improved Operational Efficiency VAT and Stamp Duty Elimination Margin Debt Relief Investments in OTC Trading PlatformsRev 4/23/2013 The Nigerian Stock Exchange 13

|Click 2013 to Outlook edit Master title styleGLOBE• Fiscal drag for the US projected in 2013, while European sovereign debtfears ease.• Concerns over China’s growth begin to ease and stronger growthexpected.• Projected global growth for 2013 is 2.4% (OECD).AFRICANIGERIA• The search for gains by global investors will further place emerging andfrontier markets in the path of increased trading activity and growth.• 2013 projected growth for Africa at 4.8%.• African nations expected to maintain positive growth trajectory - Ghana7.7%, Angola 7.1%, Nigeria 6.6%, Kenya 5.5% and South Africa 3.6%(ADB).• Projected national growth for 2013 of 7.67% (NBS).• Falling inflation expected as a result of government policy on fuelsubsidy, however, CBN restrictive monetary policy expected to helpcounter effects.• Positive Government initiatives to continue - increasing powergeneration, financial inclusion, agricultural transformation, andstrengthening fiscal discipline are expected to carry over into the NewYear.Rev 4/23/2013 The Nigerian Stock Exchange 14

|Click Nigerian to edit Capital Master Market title style and NSE Outlook• The Nigerian Capital Market will continue to face challenges around liquidity and depth, but concerted efforts toaddress the situation are underway.• Expect growth trend experienced in Q4 2012 to extend into 2013 as investor confidence measures by the NSEmature.• Anticipate the relative attractiveness of FGN bonds to continue for local and global investors, as a result of recordhighyields and new attractive issuance.• National bonds to remain in the international spotlight due to their upcoming inclusion into Barclay’s EmergingMarket Local Currency Bond Index.• Foreign issuers such as the International Finance Corporation (IFC) are expected to enter the Nigerian bond market.• Contributing factors to optimism about the capital market include:– Early passage of the national budget;– Pronouncement to begin investing proceeds of the Sovereign Wealth Fund (SWF) in March 2013;– Elimination of VAT and stamp duties, expected to take effect in 2013; and– Continued product innovation by the Exchange, including the commencement of secondary bond markettrading, and introduction of new indices and ETFs.Rev 4/23/2013 The Nigerian Stock Exchange 15

|Click Key 2013 to edit Initiatives Master title styleNSE PILLARS SHORT-TERM (2013)1. Targeted Business Development Efforts • ASeM Re-Launch• Derivatives Feasibility Study• Product Innovation (e.g. ETFs, NDRs)2. Strong Regulatory Environment • Enhanced Rulebook• Issuer’s Portal• Improved Cooperation with Other Exchanges and GlobalOrganizations• Whistle Blowing Programme3. 21st Century Technologies Strategies • Delivery of New Trading Platform• Automation of Transaction Lifecycle4. Growth-Enabling Market Structure • Transaction Cost Analysis• Market Optimization5. First-Rate Investor Protection Programs • Financial Literacy Programme• Operation of Investor Protection Fund6. Market Development and Improved Operational Efficiency • Policy Advocacy• Corporate Social Responsibility (CSR) Programme• DemutualizationRev 4/23/2013 The Nigerian Stock Exchange 16

|Click Conclusion to edit Master title style• The Exchange will continue with innovations centered on technology and product development, aswell as on advocating changes to policy.• By the end of 2013, we will have established our technology competitiveness, restored our regulatorysoundness, and advocated the policy changes necessary to enable us absorb the forces of change.• The Exchange will be well-positioned to adapt our business to meet the shifting needs of its clients.• Achieving competitiveness will be at the forefront of the Exchange’s agenda.• The Exchange will work to achieve its goal of transforming the Nigerian capital market and helping tofacilitate the emergence of the next group of ‘African Champions’.• We are on course to delivering service excellence, and positioning ourselves as the undisputed“gateway to African markets”.Rev 4/23/2013 The Nigerian Stock Exchange 17

Click to edit Master title styleThank YouQuestions & Answers

Click to edit Master title styleThank YouStock Exchange House2 - 4 Customs StreetP.O. Box 2457, MarinaLagos Island, Lagos, Nigeriaoonyema@nse.com.ng