Nigerian stocks fell 0.75 percent Wednesday after the excessive use of force on peaceful protesters by the Nigerian army across the country sent negative signals to the investor community.
About 78 unarmed protesters were reported dead by multiple eyewitnesses during sporadic shootings by the Nigerian military at Lekki, in heart of the country’s commercial city of Lagos, on Tuesday night.
As expected, the investing community is already responding to the news of the bloody attacks with the All-share Index of the Lagos Bourse dipping 0.75 percent at 2.55 pm Nigerian time. That is the first major loss to have been recorded in the last seven trading days.
On other days since the now two-week-old protest began, the market has largely remained flat with investors observing the outcome of the protest.
All segments of the market from Banking to consumer goods down to oil and gas all closed the day in the red.
The ASI of banking stocks dipped (1.7%), Oil and Gas (0.3%), Consumer goods (0.13%), Industrial goods (0.34%), while the index of the 30 most capitalized firms on the exchange fell by 0.84 percent. By noon, the market went down by about 1.42 percent and later settled at 0.75 percent.
Wapic, Portland Paint, UAC Property, and Nigerian Breweries were only 4 companies that recorded a gain in the market as compared to a total of 34 others that reported a loss in stocks. Wapic gained (10%), Portland (2.45%) Paint, UAC Property (1.23%), and NB gained 0.97 %
“The performance of the market today shows that investors are increasingly worried about the protest which has deteriorated in social unrest threatening lives and property of citizens,” said Gbholahor Olorungo, an equity research analyst at CSL Stockbrokers.
According to Olorungo, the mild uptick recorded in the later time of the trading session was due to investors picking up lower level stocks due to their attractiveness.
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“For foreign investors, the liquidity constraint in the FX market implied that they are unlikely to get the required dollar liquidity to repatriate their funds even when they decide to sell. For domestic investors, the depressed yields in the fixed income market alongside robust liquidity in the market forced them to pick up stocks at those entry points,” he said.
The situation doesn’t appear to be dowsing off with reports of hoodlums razing fire on government property particularly in Lagos, in retaliation to the killings.
The social upheaval if prolonged could worsen Nigeria’s macroeconomic uncertainty and cast a spell on the perception of investors towards the country, according to several analysts who spoke with BusinessDay.
Bloomberg reported earlier today that yields on Nigeria’s 2032 dollar bonds climbed 15 basis points to 8.26 percent by 8:31 a.m. Wednesday in London, after jumping 21 basis points on Tuesday on the back of the bloody assault on protesting youths in the country.
Omotola Abimbola, a macroeconomist analyst at the investment house, Chapel Hill Denham, said “there is an element of dissent in the public that has been worsened by the macroeconomic situation in the country of high unemployment rate which has encouraged violence.”
The ruthless killings have drawn concerns from the international community many of whom expressed their dissatisfaction with the occurrence.
A former United States secretary of state, Hillary Clinton, U.S presidential aspirant, Joe Biden; American pop singers, Beyonce, Nicki Minaj, and Rihanna, are among those who have lent their voice against the uncalled killings of Nigerians.
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