Nine days on, Nigerian stocks rise again

Nigerian stocks rose to end an eight-day rout on speculation that a decline to the lowest levels in more than 3 1/2 years was overdone.

The Nigerian Stock Exchange All Share Index climbed 3.6 percent, the most since Dec. 30, to 23,272.72 by 12:07 p.m. in Lagos as 30 shares gained, 12 fell and 137 were unchanged. The gauge is advancing even as emerging-market securities extend their worst ever start to a year and oil prices tumble further to 12-year lows.

Nigeria’s benchmark gauge has dropped 19 percent this year to near the lowest levels since July 2012. That’s the biggest decline among 93 primary indexes tracked by Bloomberg after Saudi Arabia’s Tadawul All Share Index and making equities in the continent’s largest oil producer the cheapest in sub-Saharan Africa. The drop in 2016 shows how wary foreign investors have become about putting money into a country they say is on the cusp of devaluing the naira because of lower crude prices, which would immediately wipe out gains converted back into foreign currency.

“This is just some investors taking advantage of these low prices and, based on the significant upside potential, who want to hold them for the long term,” Ayodeji Ebo, head of research at Afrinvest West Africa Ltd., said by phone from Lagos. “This will not last for long. It can’t be sustained because the fundamentals remain weak and policies have not changed. It will be short-lived.”

The gauge’s 14-day relative strength index fell to 17.3 on Tuesday, the lowest since Nov. 24, and below the 30 level that some technical analysts consider oversold for a fifth day. The measure was at 28.2 on Wednesday