Stock Market Hits 3-year Low on Persistent Bear Run

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The persistent decline of stock prices on the Nigerian bourse sent the market to a three-year low on Monday as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) went down by 0.84 per cent to be at 27,385.69. The market has recorded a month-to-date and year-to-date decline of 6.1 per cent and 20.3 per cent respectively. The NSE ASI last hit this level in 2012.

Market operators have attributed the lackluster performance of the market to weak demand engendered by  negative investor sentiments over poor results and slow  federal government’s slow response to economic challenges.

The stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index , shed 0.84 percent on Monday on thin volumes to close at 27,385, a level last seen in December 2012. The index is down 20.3 percent year-to-date.

Also  Reuters quoted Head of Research, Afrinvest West Africa, Mr. Ayodeji Ebo as attributing the negative trend to  foreign investors  who are being discouraged by certain policies of the Central Bank of Nigeria(CBN).
“The role foreign investors play in the Nigerian equity market cannot be ignored … hence the need for the central bank and government to review their stance on forex policies,” Ebo said.

Yesterday’s bears were led by PZ Cussons with 6.16 percent while Cement Company of Northern Nigeria (CCNN) and Forte Oil both shed 5.0 percent each just as  Unity Bank  Plc fell by  4.9 percent.

Meanwhile, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, at the weekend said the exchange was  not  the  only affected by the  decline.
According to him, the global developments have negatively affected as of all the 24 exchanges in Africa, 20 are experiencing a downturn.

However, he said opportunities still exist for investors in stocks, in spite of the current downturn in the capital market.

“If you look at large, mid and small cap securities; mid cap securities have done well, they have returned about six per cent positive. Now the whole market is about 18 per cent down and that is because of the weight of the large cap securities,” Onyema said.

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