In its worst performance since the 2008 financial
crisis, the NSE All-Share Index and market capitalization depreciated by 13.49%
to close the week at 22,733.35 basis points and N11.847 trillion respectively1.
The decline in the market index is underpinned by the Saudi Arabia-Russia oil
price war following Russia’s failure to cut oil supplies as well as the
coronavirus pandemic. The NSE Banking Index, NSE Consumer Goods Index, and NSE
Premium Index were among the worst hit as they fell by 26.2%, 21.7% and 16.1%
respectively. Due to the high global connectivity and the dampened demand in
developed countries as a result of the pandemic, the downslide in the Nigerian
market is similar to ongoing trends in the markets of other African countries,
Asia, Europe and North America; and is expected to continue until the risk
factors are addressed. While the uncertainty has caused many investors to sell
off risky securities such as stock, investors should rather take advantage of
the low stock prices to increase their investments as the bearish trend in the
market is driven by temporary risk factors and not a fall in companies’
fundamentals.
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