Fidelity bank banner Bayelsa State banner
Stocks fall to three-year low as foreigners dump Nigerian market

By News Express on 01/12/2015

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 4,214


Nigeria’s stocks fell to their lowest level in almost three years as foreigners exited the market amid fading hopes that President Muhammadu Buhari’s government can revive an economy growing at its slowest pace this century.

The Nigerian Stock Exchange All Share Index dropped 0.8 percent to 27,385.69 at close in the commercial capital of Lagos, the lowest since December 2012. The gauge declined on all but three trading days in November for a monthly drop of 6.2 percent.

“The government has not come up with a definitive policy for the economy,” Pabina Yinkere, an analyst at Vetiva Capital Management Ltd., said by phone from Lagos. “The continued lack of clarity is affecting the stock market.”

While Buhari, a 72-year-old former general who came to power in May, has prioritized stamping out corruption in Africa’s biggest economy and oil producer, investors were irked by a delay of more than five months in forming a cabinet, which he swore in Nov. 11. There’s also concern that his support for the central bank’s currency-trading restrictions are choking businesses of the dollars they need to pay foreign suppliers.

Almost two stocks declined for every one that rose. Guaranty Trust Bank Plc, the nation’s biggest lender by market capitalization, dropped 2.7 percent to 20 naira ($0.10). The stock is down 21 percent this year, about the same as the overall index. That’s the biggest fall in sub-Saharan Africa after the Zimbabwe Industrial Index.

Specialist African funds including Alquity Investment Management Ltd. and Duet Asset Management Ltd. have lowered their Nigerian exposure because they think that central bank Governor Godwin Emefiele will be forced to devalue the naira, which would cause losses on holdings in foreign-currency terms. Last week’s interest rate cut by the central bank, its first in six years, will heap more pressure on the currency, according to David McIlroy, Alquity’s chief investment officer.

The naira was unchanged at 199.05 per dollar and has been all but fixed at 198 to 199 since early March. Forward prices suggest it will weaken to 241.25 in a year.

“The surprise reduction in rates has probably worried international investors even more,” McIlroy said by phone from London. “Given the inflation rate is above the central bank’s target, there’s pressure on the currency and they need to attract foreign capital, you’d expect interest rates to be rising.”

Annual inflation was 9.3 percent in October, higher than the central bank’s target of 6 percent to 9 percent.

Alquity held about seven Nigerian stocks at the beginning of 2015, including Guaranty Trust Bank and Zenith Bank Plc. It now holds only Dangote Cement Plc. Equity funds are more underweight in Nigeria than any other frontier and emerging market, except for Kuwait and Morocco, analysts at Renaissance Capital Ltd. said in a Nov. 23 note to clients.

“We’ve increased our positions in Egypt and Kenya at the expense of Nigeria,” McIlroy said.

Nigeria is reeling from crude prices that have plunged 57 percent since June 2014. Economic growth will slow to 3.2 percent this year from 6.3 percent in 2014, according to a Bloomberg survey of economists. That would be the slowest pace since 1999. (Bloomberg)

Source News Express

Posted 01/12/2015 05:56:23 AM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25 minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
First in history: Man contracts Zika virus through...

Light rain showers likely today in Port Harcourt,...

EFCC may declare ex-commissioner wanted over N6bn

APC shuts out Igbos and South-South from top...

Let us strive to be more like Jesus,...

Court remands 3 herdsmen for kidnapping

HURIWA faults arraignment of Police Commission’s Director by...

Oil blocks: Niger Delta leaders table demands to...

War against Boko: Another 400 Nigerian soldiers flee...

Nigeria yet to take full advantage of insurance...

Lagos businessman in EFCC net over N3.8bn bank...

Anglican Archbishop identifies reason behind Biafra agitation, proffers...

 

Latest News 2019 general elections to cost N242.4bn 3,000 protesters shut down Imo over impeachment plot to oust deputy governor 'Half trillion naira locked in corruption cases' Human Rights Lawyer writes ICC Prosecutor, seeks interrogation of Buhari during visit You’re a failed Senator, Okorocha replies Umeh EFCC fails to present witnesses in Sen Jang’s case Katsina engages 5,000 teachers Dasuki: Court serves warrant of release on DSS, AGF •Family, friends, associates await release Buhari declines assent to 4 Bills Reps to IGP: Beef up security in Adamawa EFCC re-arraigns Orji Kalu, raises charges to 39 counts Buhari assures ICC of free and fair elections in 2019

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (361,766 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (358,283 views) Shameless Genevieve Nnaji exposes breasts in public (286,616 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (235,214 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (214,401 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (212,494 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (186,367 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (168,304 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (156,248 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (152,628 views) Lagos plane crash: Journalist releases victims’ names (147,524 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (138,771 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (52) Business & Economy (3,345) Business Verdict (45) Columnists (886) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (516) Features (614) Global Business Monitor (284) International (2,135) Interview (157) Live Commentary (28) Love Matters (127) News (37,197) Opinion (1,024) Pidgin (10) Politics (5,591) Religion (783) Sports (1,612) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

FRANCE vs CROATIA 4-2 Highlights & Goals 2018

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement