Nigerian Stock Exchange Drops 2.89 Percent

• Nigerian Stock Exchange Drops 2.89 Percent

The Nigerian Stock Exchange continued to drop last week following weak business sentiment and growing economic uncertainty.

The All Share Index that gauge the Nigerian Stock Exchange depreciated by 2.89 percent to 35,446.47 basis points, while the market capitalisation of listed stocks declined by 2.86 percent to close the week at N12.941 trillion.

A total of 925.630 million shares worth N8.333 billion were traded in 15,565 transactions during the week, lower than the 1.391 billion shares valued at N20.316 billion that were traded in 20,064 transactions the previous week.

The financial sector was the most active during the week, with a total of 680.751 million shares valued at N5.283 billion traded in 8,524 deals. Therefore, contributing 73.54 percent and 63.40 percent of the total shares turnover volume and value respectively.

While 47.664 million shares worth N31.197 million were traded from the health industry, making it the second most active industry during the week. The Third by volume was the conglomerates industry, a total of 40.814 million shares were reportedly traded.

The weak economic sentiment amid political uncertainty in the country continued to impact the Nigerian Stock Exchange market, especially with the rising capital outflow due to rising U.S interest rates and growing global trade tensions.

The Central Bank of Nigeria, during the last Monetary Policy Committee meeting in Abuja, said implementation of the 2018 budget and expected election spending may impact consumer prices towards the end of the year. Therefore, the apex bank is likely to raise interest rates from the current 14 percent in order to sustain capital inflows and moderate prices.

Meaning, the fixed income market might experience a surge in demand. However, politics will decide economic direction as the surge in interest rates might not be enough to sustain capital importation needed to deepen economic growth.