Investors on the Nigerian Stock Exchange (NSE) lost N2.49 trillion or 15.64 per cent between January and July, a development experts attribute to the political uncertainty in the country.
Data obtained by National Daily from the exchange showed that the market capitalisation which closed at N15.895 trillion in January declined to N13.409 trillion in July.
Similarly, the All-Share Index lost 7,325.87 points or 16.52 per cent during the period under review, closing at 37,017.78 in July compared with 44,343.65 in January.
Reacting to the development, Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said the performance of the market was dismal and eroded the growth recorded in January.
He said the market had remained bearish despite the oil price recovery, stable exchange rate, retreating inflation and even improved company fundamentals. He, however, attributed the development to heightening political tension, insecurity from herdsmen and economic uncertainties from the delay in budget implementation.
Also, adding his voice, Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun, said the bearish trend was caused by movements of interest rates in the United States which resulted in withdrawal of money from the market by foreign investors.
“The seeming sustainability of the downward trend is caused by fear of local investors that they might be losing large amounts of money if they don’t sell off their securities now,” Tella said.
Mazi Okechukwu Unegbu, former President, 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 had pulled out their funds from the nation’s market, especially portfolio investors.
He added that politicians should stop their daily political altercations in the media, which he said was fueling fears among investors.
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said the performance of the capital market had remained negative from February to date.
Kurfi attributed the trend to the exit of foreign investors and the institutional investors, and that the market witnessed a lot of sell pressure. He also said the Pension Funds Administration failed to invest due to political risks.
“We hope to see revised trends probably after primary elections when the foreign investors are likely to review the prospective candidates and take decision,” Kurfi said.