Naira faces more pressure, loses N93b in global market

The Nigerian Exchange Limited (NGX) is experiencing more pressure, as investors continue to face uncertainty about investing and trading in the country. This is a result of the global market decline.

This crisis has led to a N93bn loss in market capitalization which now stands at N55.40tn. The All-Share Index fell to 97,582.41 points, down 0.17 percent from the previous close of 97,741.86 points.

Meanwhile, current trading saw 9,738 transactions totaling N6.217bn, with 324.02m units of shares exchanged. The market breadth was negative, as 23 equities gained while 25 equities saw their prices drop.

On Monday, the domestic bourse saw a significant downturn, with investors losing N93 billion due to uncertainties from recent protests and looting. The NGX All-Share Index and Market Capitalization fell by 0.17% and N93 billion, respectively.

The banking sector was notably affected, with some branches shutting down due to vandalism fears.

Despite overall negative trends, some stocks like Fidelity Bank, FBN Holdings, and UBA appreciated. Among the top gainers were International Breweries, Presco Plc, and Sovereign Trust Insurance, each posting a 10 percent increase to close at N4.62, N485.10, and N0.55, respectively. Meanwhile, Chams Plc led the losers with a 10 percent decline to close at N1.98, followed by University Press Plc, which shed 9.92 percent to close at N2.18, and The Initiate Plc, down 8.26 percent to end at N2.

Experts have also expressed concerns over the detrimental effect on Foreign Direct Investments (FDIs) in Nigeria. Olatunde Amolegbe, CEO of Arthur Stevens Asset Management Limited, highlighted that Nigeria, though slower to react, will feel the global market impacts within 2-3 months due to its less integrated market.

“The NGX did close in the red Friday and Monday trading sessions although it did not see a crash on the same scale as global markets,” Amolegbe said.

He stressed the importance of cautious monetary policy by the Central Bank of Nigeria (CBN), which is unlikely to lower rates soon given the high inflation. He advised investors not to panic over global market events.

Mike Eze, CEO of Crane Securities Limited, compared the situation to the 2008/2009 financial crisis, suggesting the downturn might be short-lived and could attract foreign investors seeking safer havens.

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Chiazor Victor, Head of Research and Investment at FSL Securities, called for strategies to prevent further escalation, similar to the business continuity measures during the COVID-19 pandemic. The combination of global stock crashes, domestic protests, and a windfall tax has raised investor concerns.

The global market turmoil was triggered by a U.S. jobs report indicating a hiring slowdown, raising fears of a recession due to high-interest rates. European indices and major Asian markets also suffered, with significant declines in tech stocks. Oil prices and cryptocurrencies saw notable losses, adding to the global financial strain.