Nigerian Equities Drop N85bn on Wednesday

• Nigerian Equities Drop N85bn on Wednesday

The Nigerian equities declined further on Wednesday after shedding 0.69 per cent on Tuesday.

Investors had embarked on aggressive profit taking on Tuesday after it became clear president Muhammadu Buhari is going to win the election.

The All-Share Index declined by 0.71 per cent to 32,244.24 from 32,473.82 on Tuesday. While market capitalisation dipped by N85 billion to N12.024 trillion.

Experts, however, expect the stock market to rebound following the conclusion of the presidential poll, but it appears investors are not convinced on the direction of the economy.

Explaining why investors are not upbeat about president Buhari’s second term, Bethel Ikoro, business and economic researcher at Investors King, said the administration is still faced with tight fiscal policy, terrorism and unstable oil market about to be further disrupted by rising US oil exports to South East Asia.

“Investors are not expecting major macro-economic change going forward. Its a continuation of policies that led the nation here.”

Analysts at Lagos-based CSL Stockbrokers Limited, validated Ikoro’s points, by saying they also do not anticipate increased job creation.

“We do not anticipate a significant growth in job opportunities. In addition, we expect the government to continue borrowing aggressively to finance its infrastructure development plans in the wake of constrained revenues,” the firm stated.

“Nigeria’s credit challenges remain and include a low growth environment, very high exposure to fluctuations in oil prices of government revenues and export earnings, weak institutions, and high levels of corruption,” stated Aurelien Mali, Vice President of Moody’s.