Economic woes hamper Nigeria Stock Exchange
According to the First Bank of Nigeria, one of the leading financial houses in the country, the bourse in Lagos is the worst-performing of the three African indices the firm intermittently track.
NSE’s all-share index (ASI) recovered from a low of -21,6 percent year-to-date on January 19 to close the month at -16,5 percent and further to -9,3 percent as of Friday.
The pick-up in the NSEASI since the beginning of March tracks that in the crude oil price.
“Trading values have been pitiful this year on the NSE,” FBN Capital stated on Monday.
It pointed out NSE averaged US$11,6 million compared with US$26,6 million in the same period of 2015.
“This can be explained in good measure by the dramatic loss of buying interest from the offshore portfolio community in response to the slowdown in growth, the CBN’s exchange-rate policy and acute fx shortages,” FBN Capital stated.
On the other hand Nairobi Stock Exchange has benefited from the disillusionment of the foreign player with Lagos, particularly the
dedicated Africa funds which have limited investment destinations. Also the Kenyan economy is growing by about 5 percent annually.
FBN Capital stated Johannesburg’s performance of 1,7 percent ytd had defied the sluggish economy, the mounting pressures surrounding the Jacob Zuma presidency and rising unemployment in the mining industry.
“The NSE would benefit above all from some sizeable new listings, and in sectors barely represented on the exchange. In time there should be some good news from the restructuring of the NNPC. We urge patience,” FBN Capital stated.
– CAJ News
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