Global price crash shocks Nigeria’s capital market

LAGOS—Last week’s massive losses in the international commodities and financial markets have resonated further in the Nigerian space at the opening of business yesterday as the Nigerian Stock Exchange, NSE, benchmark index, the All Share Index, ASI, declined 2.2 per cent to 29,214.13 points bringing Year-To-Date loss to 15.7 per cent, the greatest loss in six months. –

Investors lost N227.7 billion yesterday to peg market capitalization at N10 trillion at the close of market. Likewise, market activity declined as value and volume traded shed 43.9 per cent and 25.5 per cent to N2.8 billion and 257.7million units respectively.
This development came as oil price crash in the international market continued with Brent Crude, Nigeria’s Sweet Crude benchmark, and West Texas Intermediate crude both traded at six-year lows of USD43.48 (down from last weekend’s price of USD45.46 and USD38.89 (down from USD39.89 last weekend) a barrel, respectively.

Basic provisions of 2015 budget
This meant further erosion of Nigeria’s ability to implement the basic provisions of 2015 budget.
Financial and investment bankers who spoke to Vanguard yesterday at close of markets indicated that they expected the development in the international markets to worsen market outcomes in Nigeria this week.
According to Afrinvest Group, a Lagos investment banking firm; “Today’s (yesterday) performance reflects the negative sentiments that have persisted in the Nigerian equities market.
Given the sustained run of losses in the market and the absence of a catalyst to excite investors, performance is expected to be driven by speculations in the short term, thus, we advise investors to maintain medium to long term investment horizons as headwinds continue to bedevil the equities market in the short term.”
The bears had sustained its reign over the Nigerian stock market last week as the market closed in the red on four trading days of the week extending weekly losses for the third consecutive week.
Analysing the global trend Afrinvest economists had said “negative investor sentiments persisted across regions given sustained pressures on oil prices while slowdown in the growth of the Chinese economy (world’s 2nd largest economy) has further exacerbated poor sentiment.”

The analysis
The analysis added that the recent devaluation of the Chinese currency, Yuan, has heightened uncertainties across regions, prompting a further pullback in the global equities markets last week.
– See more at: http://www.vanguardngr.com/2015/08/global-price-crash-shock Nigeria market