The Nigerian Exchange Limited experienced a continuation of bearish sentiments as reactions to the Supreme Court’s judgment on the 2023 general elections resulted in a N67bn reduction in market capitalisation. This downturn marked the second consecutive day of negative trading on the local exchange.
Major contributors to this decline included MTN Nigeria, which saw a 0.40% drop, Flour Mills with a 3.23% decrease, Stanbic IBTC down by 3.21%, Computer Warehouse Group plummeting by 9.94%, and Fidelity Bank decreasing by 1.82%, among others.
The Supreme Court’s decision confirmed the Presidential Election Petition Tribunal’s ruling, which validated President Bola Tinubu’s victory in the February 2023 election. The All-Share index experienced a 0.18% drop, closing at 67,084.95 points, with the market cap settling at N36.856tn.
The market breadth, an indicator of investor sentiment, was negative at 0.41x. A total of 29 stocks depreciated against 12 that gained in value. The day’s trading volume decreased to 267.65 million units of shares valued at N5.1bn.
Sector-wise, Banking and Insurance indexes were the hardest hit, declining by 0.33% and 1.82% respectively, due to sell-offs in Stanbic, Prestige, Cornerstone Insurance, GTCO, and Zenith Bank. On the positive side, the Consumer Goods sector grew by 0.12%, driven by Nestle and Transcorp.
The recent downturn in the Nigerian Exchange Limited, triggered by the Supreme Court’s judgment, underscores the intricate relationship between political events and financial markets. Investor confidence can be swayed by political decisions, leading to significant market reactions.
While the NGX’s bearish trend is concerning, it’s crucial to view it within a broader context. Markets are inherently volatile, influenced by a myriad of factors, both domestic and international. Political events, especially those of significant magnitude like general elections, often have short-term impacts on stock exchanges worldwide.
However, investors and stakeholders need to maintain a long-term perspective. While short-term fluctuations can be disconcerting, the NGX has shown resilience in the past and has the potential to recover. It’s crucial for regulatory bodies and the government to ensure transparency and stability, fostering an environment conducive to investor confidence.
Did You Know?
- The Nigerian Exchange Limited (NGX) was formerly known as the Nigerian Stock Exchange (NSE) before its demutualisation in 2021.
- Nigeria’s stock market is one of the largest in Africa, with over 160 listed companies.
- The NGX plays a pivotal role in Africa’s financial landscape, serving as a gateway for international investors seeking opportunities in the continent.
- The All-Share Index (ASI) is the primary index of the NGX, reflecting the overall market performance.
- The NGX has a history dating back to 1960, making it one of the oldest stock exchanges in Africa.