Oredola Adeola |
Post-election jitter has continued to impact on the Nigerian equities market as portfolio investors have been monitoring the country’s political trend, causing a sustained losses totaling N 170bn in two days.
This is happened after the announcement of President Muhammadu Buhari and Vice President Yemi Osinbajo as winner of the Saturday, February 23 Presidential election.
The Editorials discovered that the sentiment of investors on the market has been negative, while they have been cautious in taking investment positions even after the election and announcement of winner.
Nigerian equities market on Wednesday extended negative trend in the second trading session of the year as the All-Share Index declined by 0.96 per cent., shedding 298.74 basis points, representing to close at 30,771.32 points while market capitalisation shed N111 billion at N11.475 trillion.
Earlier on Tuesday the market recorded negative performance as investors lost N85.611 billion, as All Share Index declined 0.71 per cent to close at 32,244.24 points following continued profit taking in Zenith Bank (-3.5%), Unilever Nigeria (-4.7%) and Oando (-9.7%). During the trading day, investors’ wealth decreased N85.6 billion to N12.0 trillion while year-to-date gain reduced to 2.6 per cent.
However on Wednesday, the downturn market trend was impacted by losses recorded in medium and large capitalised stocks, impacting the oil/gas and banking sectors.
 |
| Call 08098262437 to advertise book this space |
Analysts have projected that the market would be moderated as soon as the President and his cabinet settles down for the next-level, riding on the success recorded during his first term.
PDP PRESIDENTIAL CANDIDATE, ALH. ATIKU ABUBAKAR REACTS TO NSE LOSS
Reacting to the loss recorded in the Nigerian equities market, Alh. Atiku Abubakar, Presidential candidate of the Peoples Democratic Party (PDP) in last Saturday’s election has called on the international investors not to pull out of the economy, promising that his mandate would be restored.
Speaking tat the Shehu Yaradua Centre in Abuja on Wednesday in a press conference following his defeat by APC candidate at the Saturday poll, he urged the investors to be patient and keep faith with the Nigerian people.
“Your problem is not with the Nigerian people; your quarrel is with those who stole their mandate. Please do not punish the people by divesting from Nigeria.”
MORE REACTIONS
While the Presidency is yet to make official statement in reaction to the market loss analysts at Coronation Merchant Bank are of the view that Buhari’s vicory will lead to speedy passage of the budget, while the country will maintain government with strong regulation and managed exchange rate policy.
In a statement titled, ‘Implications of APC victory’ the Merchanr Bank said, “This morning’s announcement of election results saw the All Progressives Congress (APC) of President Muhammadu Buhari retaining the presidency, defeating the challenge from the Peoples Democratic Party (PDP) of Atiku Abubakar.
“This implies a continuation of government based on firm regulation and security. However, while Buhari’s first term sailed into the oil price crash of 2015 and the recession of 2016, economic conditions are different – arguably better – now.
“The APC’s renewed majority in the Senate is significant. The Senate proved frustrating to Buhari’s agenda in his first term, 2015-19; expect the budget to be passed quickly this year.
“Nigeria will almost certainly continue with a managed exchange rate. As we argue in Coronation Research: Year Ahead 2019, A Year of Two Halves, 15 January, the Naira is within 10 percent of its fair value, so fundamental pressure to revalue it is weak. Forex reserves are $42.4 billion, which we calculate is compatible with Naira/Dollar stability, at close to NGN363 per dollar, for the rest of 2019.
“A feature of President Muhammadu Buhari’s first term as President was weak economic growth, 2015-18. GDP developed well below trend and fell into recession in 2016. One key cause was the oil price collapse in late 2014 and 2015 which put pressure on: government revenues; the Naira exchange rate; the trade account; and Nigeria’s ability to import critical industrial inputs.
“Low growth has been associated with rising unemployment, which not only took off in 2015 and 2016, as the economy slowed and went into recession, but continued to rise during the weak recovery that followed.
“The administration’s policy emphasis during this period was on: security; the fight against corruption; tax compliance; and tight regulation, which included exchange controls. Agriculture (25 percent of GDP) was supported with subsidized fertilizer and soft loans, and never went into recession; and an Economic Recovery and Growth Plan was enacted. One can argue that, after Naira devaluations in 2016 and 2017, the worst is behind us.
“If external shocks in the coming period 2019-23 are not as great as those during 2015-19, then the nascent economic recovery might give this administration an opportunity to address pressing domestic issues. These include the insurgency in the North East, the herdsmen crisis in the Middle Belt, and disruption in the Niger Delta. Economic growth is a better platform for politics than recession.”
Comments
Post a Comment