Stock market rout persists on Nigerian Bourse amid oil, covid-19 shocks

The rout in Nigeria stock market continued on Wednesday, March 11 as investors feared growing uncertainties in both global and local economies.

The domestic market remained volatile in the face of uncertainties around global crude oil prices, the Coronavirus (covid-19). Also, speculations around the possible devaluation of the local currency continue to make stocks unappealing to investors.

Oil prices fell on Wednesday, giving up earlier gains after Saudi Aramco said it had been directed by the energy ministry to raise its production capacity by a million barrels per day.

Saudi Arabia intensified the oil price war by ordering its state-owned producer, to raise the maximum production rate to record highs of 13m barrels a day.

Brent crude slid $1.20, or 3.2%, to trade at $36.01 per barrel, while U.S. West Texas Intermediate crude dropped $1.12, or 3.2%, to $33.24.

As at 2:30 pm on Wednesday, Nigeria’s listed stocks shed over N425billion, an implication that investors are still not willing to take up this Naira assets. Nestle Nigeria Plc led the basket of losers after its share price decreased from N1017 to N915.3, losing N101.7 or 10percent, followed by that of Dangote Cement Plc which decreased from N170 to N153, losing N17 or 10percent. Unilever Nigeria Plc rallied most, from N10.6 to N11.65, losing N1.05 or 9.91percent, while UBA Plc rose from N5.65 to N6.2, adding 55kobo or 9.73percent.

Ahead of Wednesday’s outcome, FBNQuest research analysts had expected the bearish stance to persist on the nation’s bourse. Though, they added that bargain hunting may give the market support incoming session.

As at the sound of closing gong on the Bourse, the Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 3.35percent from preceding trading day high of 24, 388.66 points to 23,572.75 points. The value of listed stocks decreased from N12.709trillion to N12.284trillion. The market has decreased by -10.30percent this week, -10.08percent this month, and -12.18percent this year.

In 7,150 deals, equity investors exchanged 1.391billion units valued at N17.647billion. Zenith, GTBank, FBNH, UBA, and Wapic Insurance were actively traded stocks on the Bourse.

Dollar goes off market, sells above N370/$

By Hope Moses-Ashike • March 11, 2020

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.