Stock market as viable investment window for Nigeria's – The Sun Nigeria
16th January 2023
By Chinwendu Obienyi
Nigerian entertainment and creative industry has experienced massive growth over the last few years.
Accounting for about 1.45 per cent of Nigeria’s Gross Domestic Product (GDP), Nollywood, which is the movie production sub-sector of the entertainment and creative industry, is globally recognised as the second largest film producer in the world, coming behind America’s Hollywood and ahead of India’s Bollywood.
According to PricewaterhouseCoopers (PwC), Nigeria’s consumer revenue in entertainment and media (E&M) will rank 4th as the fastest growing country by 8.8 per cent from 2022 to 2026.
The global consulting firm in its latest industry titled “Perspectives from the Global E&M outlook 2022-2026, added that the rate will be driven by strong growth in video games, music and cinema.
The popularity of the industry has seen Nigerian music artists collaborating with their foreign counterparts and striking multi-million dollar music recording and publishing deals with international records publishing companies such as Sony Music Group, Universal Music Group amongst others.
Currently, Nigerian movie producers are able to enter into publishing and streaming deals with Netflix, Amazon Prime, Iroko TV.
On the other hand, the same success recorded in the industry can be said of the Nigerian Exchange Limited (NGX) – Nigeria’s stock market.
From the early beginnings when only 4, 19 securities were listed for trading to the now demutualized market, and then over 300 securities composed of stocks, bonds and Exchange Traded Funds (ETFs) worth N49.6 trillion in overall market capitalization combined, the Nigerian Exchange Group Plc (NGX Group) has transformed to become Africa’s gateway market, connecting Nigeria, Africa, to the world.
After recording a 50 per cent performance in 2020 and 6.07 per cent in 2021, the NGX finished the year 2022 in the green, gaining 19.98 per cent despite COVID-19 pandemic, inflation, higher crude oil prices, MPR hikes and FX scarcity.
Despite these successes, listings on the domestic bourse have been somewhat dull due to global and domestic weak macro-economy. Infact, the last time the bourse witnessed a spate of listings was between the period of 2014-2015 while many companies started delisting its shares in 2016 due to the recessions.
But there have been listings of noticeable weight via the likes of MTN Nigeria, Airtel Africa, BUA Cement, BUA Foods, Geregu Power but it is also a fact that the bourse is missing a sector that is currently adding huge revenue to the economy, that sector is the entertainment sector.
For instance, Ganesh films India, Pooja Entertainment, Mukta Arts, B.A.G Films and Media are all listed on National Stock Exchange of India Limited while Universal Arts, AMC Entertainment Holdings Inc, Walt Disney, Cinemark Holdings Inc amongst others are listed on the New York Stock Exchange (NYSE).
Furthermore, the likes of Sony Music Group, Universal Music Group amongst others are also listed on the NYSE. Although the board and management of the NGX have invited entertainers in times past to close the trading activities, not much has been done to attract both local and foreign music labels or film companies to the bourse.
For instance, Nigerian cinema operators generated a total revenue of N6.94 billion in 2022, against revenue of N4.74 billion in 2021 from movies.
This is huge considering that the country is currently grappling with inflation.
Although the NGX recently stated that it will explore partnerships with the entertainment industry to catalyse its growth and bring even more success to the country this year, there is much work to be done to ensure this is not just going to be mere words.
Speaking at the 2022 final trading day with a Closing Gong Ceremony featuring renowned filmmaker Kemi Adetiba, the Chief Executive Officer, NGX, Temi Popoola, said the exchange is seeing the growth witnessed in the industry and wants to be part of it.
“We are seeing what is happening in the industry. We want to see how we can be part of it and spread the gospel of the exchange as well as the capital market and I guess that this is one of the things we are trying to achieve today, to amplify the message.
We are extremely delighted that there are a good number of intermediaries here. The year 2022, we set out to do good things and set out to do long hanging fruits by asking ourselves how we can get key strategic listings and on this we will be able to say NGX had a successful year”, Popoola said.
Praising Adetiba for her exceptional contributions to the entertainment industry, Popoola said, “Kemi Adetiba has truly put Nigeria on the map with her incredible movie successes. We are excited to explore partnerships with the entertainment industry to catalyse its growth and bring even more success to the country.”
Responding, Adetiba said that until recently, Nigeria’s exports have mostly been oil and added that the entertainment sector has somewhat pushed Nigeria in the global scene and added to the coffers of the Nigerian economy.
“It has also helped to rebrand ourselves in the international space as a lot of our films have been shown on the biggest International festivals. You also know that we are breaking strides in streaming Nigerian movies on Netflix and Amazon Prime. Even in the music industry, we are gracing one of the largest stages, we are winning grammys and things all over the world. With that, I say that I am very humbled to be here and I hope that at some point, maybe some key players in the entertainment industry will be listed here on the stock exchange”, she said.
Also speaking, Sola Sobowale, said, “It is a big honour to be standing right in front of everyone here. I had said I knew nothing about Nigeria’s stock exchange and when Popoola spoke, my belief was that you had to have a lot of money to play in the stock market but I have learnt and this is an eye-opener for me and I am taking this home to everyone that the exchange is the place to be if they want to do any investment”.
No. 2, Coscharis Street, Kirikiri industrial Layout, Apapa, Lagos.
+234 805 6180 028
[email protected]
© 2024 The Sun Nigeria – All Right Reserved.
