Following the persisted macro economy challenges, investors in the equities market of The Nigerian Stock Exchange (NSE) lost N283 billion to underlined serious profit-taking in January.
According to records from NSE, market capitalization of all listed equities on the bourse depreciated by 3.06 per cent from N9.256 trillion it opened the year 2017 to close at N8.973 trillion on Tuesday, January 31, 2017.
Consequently, the NSE All-Share Index which is the barometer of the market movement dropped by 838.38 basis points to close first trading month at 26,036.24 basis points from 26,874.62 basis points it opened for trading in 2017.
Analysts attributed the capital market performance to macro economy challenges and investors’ sentiment trading amid hike in inflation, illiquidity in foreign exchange and government indecisive fiscal policies.
The National Bureau of Statistics (NBS) reported 18.55 per cent inflation rate in December 2016 from, 0.07 per cent higher than 18.48 per cent recorded in prior month.
Zambia’s natural advantage in the export market is the readily available captive market that consists of eight neighboring countries and other nations in the Great Lakes region.”
The International Monetary Fund (IMF) had blamed the doubled digit inflation rate on the challenges around foreign exchange, adding that efforts of the Central Bank of Nigeria (CBN) to defend the naira by foreign exchange rationing crumbled.
Analysts believed the equities market decline in January was a reflection of the nation’s economy as the economy is still in recession as expected. Investors’ confidence is still low considering poor corporate earnings by listed companies.
It was however believed that the capital market might appreciate in February once listed companies announced impressive earnings.