Chinwendu Obienyi

Fears that the bears will kick-start the new trading week on the floor of the Nigerian Stock Exchange (NSE) intensified as the domestic market reversed its bullish run, shedding 1.61 per cent to settle at 32,190.07 points following sell offs triggered by the current undefined political climate.

As a result, market capitalisation decreased by N195.8 billion to close at N12.004 trillion while Year-to-Date (YtD) gain moderated to 2.4 per cent.

Losses in bellwether stocks – Nigerian Breweries, GT Bank and Zenith Bank – were the major drags to yesterday’s performance as activity level weakened with the volume and value of stocks traded declining by 71.2 and 48.2 per cent to 233.42 million units and N3.36 billion respectively, exchanged in 4,134 deals.

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Reacting, Chief Executive Officer, Sofunix Investment, Sola Oni, said the sudden postponement of the election has deepened Nigeria’s political risk with dire consequences on investment decision. 

According to him, the shock caused by the announcement jolted the foreign portfolio investors who have been apprehensive of the presidential election. “It is not unlikely that trading on the Exchange may be moderated by this development as it is capable of further eroding investor confidence in our market. Every political decision has direct or indirect impact on the financial market,” Oni said.

 Analysts at Afrinvest said, “we anticipate the bearish run to be sustained this week due to pre-election jitters caused by the uncertainties surrounding the elections.”

 Performance across sectors was negative as all five counters of the market closed in the red. The Banking and Oil & Gas indices led decliners shedding 3.2 and 2.9 per cent respectively following profit taking in GT Bank (-3.82 per cent) and Mobil (-7.61 per cent).