The Street Reporters Newspaper has gathered that Investors in stocks of companies quoted on the Nigerian Stock Exchange (NSE) lost N2.49 trillion or 15.64 per cent between in the first seven months of 2018.
The development, according to a report by Business and Maritime News, was linked by financial experts to the uncertain political climate hanging over the country.
It reported that some financial experts who spoke on the huge loss attributed it to the political uncertainty, which has taken its toll on the stock market.
According to the report, available data from the exchange showed that market capitalisation, which closed at N15.895 trillion in January declined to N13.409 trillion in July.
This was as the All-Share Index (ASI) lost 7,325.87 points or 16.52 pecent during the period under review, closed at 37,017.78 in July compared with 44,343.65 in January.
Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, while commenting on the trend noted that the performance of the market was dismal having eroded growth recorded in January.
Uwaleke said the stock market had remained bearish despite oil price recovery, stable exchange rate, retreating inflation and even improved companies fundamentals.
He, however, blamed the heightening political tension, insecurity from herdsmen and economic uncertainties arising from the delay in budget implementation for market downturn.
For his part, Mazi Okechukwu Unegbu, a former President, Chartered Institute of Bankers of Nigeria (CIBN), said security issues and the social environment were responsible for the negative sentiments in the capital market.
Unegbu said foreign investors, including portfolio equity holders pulled out their funds from the nation’s market, ahead of perceived political tension that may be associated with 2019 general election in February.
He however said the real investment that impacts positively on the economy was foreign direct investment (FDI) in the productive sector not ‘hot money investment’ in the stock market.
Unegbu said government must encourage local investors in the market by creating an enabling environment.
He also advised politicians should stop their daily political altercations in the media, which he said was fuelling fears among investors.
Source: Business and Maritime News