The ongoing volatility in the nation’s stock market, occasioned by continued selloffs and assessed political risks, has spurred an unprecedented lull in the market, as investors count losses worth N756 billion in September.
The figure is derived from the N12.718 trillion market capitalisation and 34,837.50 points recorded in the All-Share Index, at the opening of transactions in the month of September, 2018, lost N756 billion or 6.3 per cent to close the month at N11,962 trillion, while the index dropped by 2,071.13 points to 32,766.37 points.
The Managing Director of Highcap Securities Limited, Imafidon Adonri, said social disorder and political unrest are disincentive to investments, noting that no investor would stake his fund in a country where his investment cannot be protected.
“Social disorder and political uncertainties are strong factors that determine the country risk an investor will consider before investing.
Nigeria is currently experiencing these malaises. They must be tackled with seriousness to boost investors’ confidence to increase,” he said.
According to him, the onus rests on the politician and those that are in charge of governance to establish a stable polity and ensure that that the environment is not overheated to sustain market recovery and economic growth.
“They need not to come up with frivolities that will cause conflict and crisis, because those are the things that affect the capital market,” he said.
He advised that law enforcement agencies should be more proactive and identify all flash points and violence prone areas and ensure that a robust and elaborate security arrangement is put in place to forestall any breakdown of law and order, as well as adopted early enough to avoid the usual “fire brigade” approach.
The Managing Director of Crane Securities Limited, Mike Ezeh, explained that foreign investors are already selling off their shares due to uncertainty surrounding the nation’s political space.
“Our political leaders are toying with a lot of things.
By the time we sit down and take stock of the effect of all these killings, then we will know what we have done to our national psyche.
Looking at it from the foreign investors perspective, it’ is only the daring ones that come at this time of uncertainty.
“You keep your treasure where your heart is. Locally there is apathy towards the market. People are scared of investing.
They have even resorted to sell offs for fear of the unknown,” he added.
The Chief Executive Officer of Investdata Research Consulting, Ambrose Omodion, said: “We expect the market to remain volatile as end of the month/quarter are here for window dressing by fund managers and brokers that want to balance their trading accounts for their fees, which will usher in the Q3 earning season.
“We are in a season of rising oil price, expecting new policy statement and reform that would stimulate the economy again.
By Helen Oji
The Guardian Newspaper October 1st, 2018