“The Nigerian Stock Exchange All Share Index retreated 4.2 percent (NGSEINDX) by the close of business yesterday in Lagos, the most among 93 global indexes tracked by Bloomberg,” Bloomberg stated. The gauge, down 16 percent in 2014, rose 20 percent between December 17 and the end of the year as investors were attracted to the low prices, according to Ayodeji Ebo, head of research at Afrinvest West Africa Ltd, who was quoted by Bloomberg.
“We’re now seeing profit-taking,” Ebo said by phone from Lagos. “The confidence in Nigeria is still not there. The macroeconomics are weak and oil prices are plunging.”
However, the president of Independent Shareholders’ Association of Nigeria (ISAN), Sir Sunny Nwosu, does not wholly agree that Nigerian stocks are the worst performing in the world.
“I so much doubt it. Nigerian stocks cannot be the worst performing in the world,” said Nwosu. “However, nothing is permanent; at a time Nigerian stocks were the most wanted because of the high returns on investment. So if today it has declined, what is required is for us to work hard to return to the position when they were the most sought stocks.”
Bloomberg emphasised that Brent crude fell below $50 a barrel yesterday before trading 0.1 percent higher at $51.15 and oil is down 54 percent since the end of June.
“Nigeria, Africa’s largest crude producer that relies on oil for almost all export earnings, increased interest rates to a record 13 percent in November to protect the naira,” Bloomberg reported. “The currency depreciated 10 percent against the dollar in the past three months, the most among 24 African currencies tracked by Bloomberg.”
According to the report, banks were among the worst performers. Shares of Zenith Bank Plc (ZENITHBA), the country’s second-biggest lender by assets, weakened by 9.7 percent, the most since October 2008. Guaranty Trust Bank Plc, the largest bank by market value, dropped by the same amount.
Source: Leadership
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