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Nigeria Decides

Poll shift hits exchange rate, stock market loses N196 billion



The financial services sector yesterday reacted negatively to the uncertainty in the nation’s political environment as investors priced in the risks of election postponement on the stock market and exchange rate.

The development came just as analysts polled by The Guardian at the weekend predicted that investors and financial transactions would plummet as a first reaction.

Specifically, investors lost N196 billion from share depreciation across all segments of the listed equities, even as analysts from Afrinvest Securities Limited said the bearish run would be sustained this week due to uncertainties surrounding the polls.

Before the postponement, there was a positive sentiment across board, as the market rallied in about seven consecutive days, with investors making up their mind over whoever emerges, since all the fundamentals of the market looked good.

For instance, at the end of transactions last week Tuesday, the All-Share Index (ASI) had gained 680.44 absolute points, representing an increase of 2.14 per cent, to close at 32,462.31 points.

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Similarly, market capitalisation increased by N254 billion, to close at N12.106 trillion.

Regrettably, yesterday, the market capitalisation, which opened at N12.2 trillion, lost N196 billion to close at N12.004 trillion, with the ASI depreciating by 1.6 per cent to 32,190 from 32.715 at which it opened yesterday.

The Chief Executive Officer of Crane Securities Limited, Mike Ezeh told The Guardian that the postponed election was taking its toll on the market performance because it is information-driven.

“The effect of political violence, utterances, crisis of any sort impact negatively on the market because they connote negative signals to investors, particularly about rising insecurity in the country.

“Whenever there are signs of insecurity, investors become apprehensive and shy away from such market. Our politicians must behave well. They are very rude and primitive for now,” he said.

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