Following massive sell pressure on the equity market yesterday, the local bourse recorded its biggest loss in eight months, as investors lose whooping N423 billion in one day.
Analysts and operators linked the huge losses incurred by investors to the heightened political risk as the 2019 general elections draw closer on daily basis with the gale of defections without a clear economic plan or agenda to revitalise or boost the economy.
Specifically, at the close of trading on the Nigerian Stock Exchange (NSE) yesterday, All Share Index (NSE-ASI) shed 1,156.38 absolute points, representing a decline of 3.46 per cent to close at 32,292.79 points. Also, the market capitalisation declined by N423 billion to close at N11.789 trillion.
Managing Director of HighCap Securities Limited, Imafidon Adonri, who reacted to the development, said aside massive sell off by investors, virtually all assets are currently migrating to fixed income market, leaving the stock market on a perpetual decline.
Also, analysts at Cordros Capital Limited said: “Our outlook for equities in the short to medium term remains conservative, in the absence of a one-off positive trigger, and amidst political jitters ahead of the upcoming 2019 elections. However, stable macro-economic fundamentals remain supportive of recovery in the long-term.”
In a related vein, the Association of Stockbroking Houses of Nigeria (ASHON) in a recent letter signed by the General Secretary, Sam Onuokwe, stated categorically that the political tension and uncertainties witnessed in the country is currently affecting investors’ sentiments, asset valuations, and portfolio allocation decisions.
According to the group, foreign portfolio investors and their indigenous counterparts have embarked on massive sell down of shares and other financial instruments despite improved performances of many listed securities.
It, therefore, urged the political class to moderate their activities and utterances by acting in such a manner that will boost investors’ confidence and grow the economy.
The association suggested that the political class rather than indulge in unwholesome activities and destructive utterances, should support all efforts aimed at creating the much-needed enabling environment for accelerated economic growth and development.