No respite for Nigerian equity market for now, say analysts

Stockbrokers at the floor of the Nigerian Stock Market

…loses 1.29% due to selloff

By FELIX OLOYEDE

Investors who are anticipating the Nigerian equity market to recover any time soon, would have to wait for a longer than expected, financial analysts have posited.
Massive selloff by investors caused the Exchange to dip -1.29 per cent on Tuesday, having lost -9.10 per cent in the last one month, which makes it the second worst performed bourse globally during this period, only better than Mexican Exchange.
The Nigerian Stock Exchange (NSE) has been adversely impacted by political risk in the country as it heads towards the 2019 general elections, which has triggered massive pull-out by foreign portfolio investors.
The poor performance of equity market, which has lost -18.48 per cent in the last 11 months of 2018, is further compounded by the drop in oil price, which heightened the worries of foreign investors over the safety of their investment in the country.
“There has been no catalyst in recent times to give the local bourse that necessary boost. While some of the macros appear strong, the exodus of capital witnessed in emerging markets and the heightened local political risk have contributed to the continuous decline in the equities market,” explained Abayomi Ajayi, Research Analyst at Investment One Financial Services told Business Hallmark.
He added that with oil prices declining seven straight weeks and the high fixed income yield environment, there is no real hope in sight for our equities market.
The equity market is in distress, noted Johnson Chukwu, Managing Director, Cowry Asset Management Company Ltd, saying political risk has overshadow every other thing in the economy.
He added that there is hope that the equity market may recover after the general elections which come up in February 2018.
Selloff in Seplat, Dangote Cement and 21 other losers made the bourse to shed 359.79 absolute points, representing a decrease of 1.14 per cent as the All Share Index (ASI) to close at 31,173.71 points on Tuesday.
Market Capitalization decreased by N130.86 billion representing a dip of 1.14%, closing at N11.38 trillion.
Beta Glass gained N6.20 to close at N68.30 per share to top the 14 gainers top.
Investors traded on 182.23 million shares valued at N2.75 billion were traded by investors in 3,121 deals.