The Nigerian Stock Exchange (NSE) All Share Index was down year-to-date by 16.31 percent yesterday, despite the fact that global stocks kicked off the month on a firm note.
After a brutal October, global stocks started November on stronger ground while sterling rallied on reports that Britain and the European Union are close to a post-Brexit deal on financial services.
The MSCI All-Country World Index, which tracks stocks in 47 countries, was up 0.3 percent on the day.
October was the index’s worst month since May 2012 – a loss of 7.5 percent – as shares globally took a battering on a number of factors ranging from trade wars to concerns about the global economy and higher US interest rates.
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On the other hand, the Nigeria bourse, which was the third best performing in 2017, also had its share of the October bearish market and industry experts are however pessimistic about the exchange repeating such record in 2018.
This is because they have cited the major constrictive factor that is leading to weak performance of the Nigeria equities market to be the present political uncertainties, emanating from the unforeseen circumstances surrounding the forth-coming 2019 elections.
The stock market in Africa’s largest economy as the market closed yesterday, reported a day decline of -1.42 percent from N32,466 trading price it opened the market with to N32,006, the figures compiled from the Bloomberg terminal show.
Also, the volume of transaction for the day stood at 355.7 million valued at N4.8 billion and it NSEASI reported a market capitalisation of N11.6 trillion for the period under review.
Meanwhile, a look into the European markets saw a strong start in Asia, with robust company earnings helping the pan-European STOXX 600 index hit a two-week high.
Britain’s FTSE 100 however fell 0.1 percent as the pound strengthened on a report Britain and the EU are close to a deal that would give financial services firms in the UK continued access to European markets once Brexit happens.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent, adding to modest gains the previous day.
The improved mood had filtered down to Asia from Wall Street, which rose for a second day on Wednesday as strong company results and bargain hunting of beaten-down technology and internet favourites lifted spirits.
Hong Kong’s Hang Seng rose 1.5 percent on Thursday and the Shanghai Composite Index climbed 0.2 percent.
Johnson Chuwku, MD of Cowry Asset Limited, said, “The earlier part of this year witnessed a lot rumbling in the ruling party, which scared foreign investors away from the market. So, 2018 is completely different from 2017 because 2018 is almost an election year because it precedes a national election with a lot attention now focused on political activities, leading to heightened political risk, which investors are shying away from. That is why also the equities market has not done well in 2018.
“So, it has to do with political risk in addition to some economic factors such as the normalisation of interest rate in the United States of America, increase in yield in the United Kingdom and even the normalisation of monetary policy by the European central bank and Japanese central bank.”
