Since falling to multi-year lows in April, the Nigerian Stock Market All Share Index has now jumped around 4,000 points in the last three months.
The NSE ASI which fell to as low as 20,669 points on April 4 as several states in the country embarked on partial and full lockdown to curtail the rapid growth of coronavirus in the country. However, 3 months since the country was forced to lockdown its most prosperous states, the stock market appears to have rebounded as ASI closed at 24,693 points on Friday, marking a 4,000-point march upwards.
Analysts say the stock market recovery is due largely to reduced uncertainty in the economy as the country appears to have reopened for business. Other positive contributors to the market turnaround are the currency devaluation and increased availability of foreign exchange supply in the country which improved investor sentiment.
The stock market index is now up about 19.4 percent since its lows in April but the NSE ASI is still down roughly 8 percent year to date. The stock market which initially started strongly has since entered a down spiral since February as the coronavirus outbreak and collapse in crude oil price between February and April weighed heavily on stock prices.
Investors are now breathing a sigh of relief as oil prices have significantly recovered from their low levels seen in April when crude oil price fell to $19 from its year beginning price of $66. Oil price has since recovered to $43 in July as a record oil production cut helped salvage oil prices from falling to multi decade lows.
Investors now appear more confident in the local companies and with H1 release season currently showing mixed results in the corporate market, analysts say they think stocks are more likely to go up than down as results of many companies are positively surprising investors who feared the worst.
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