23rd July, 2018
Capital market experts have urged the Federal Government to defuse political tension through constant assurances of a commitment to conduct free and fair election to stem the slide in the capital market.
They experts spoke to the News Agency of Nigeria (NAN) in separate interviews on Monday in Lagos.
Prof. UcheUwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said constant assurances of commitment to conduct free and fair election by the Federal Government were imperative.
Uwaleke said the political environment was becoming much tensed leading to withdrawal of both local and foreign investors from the stock market.
He said the government must vigorously implement the capital component of the 2018 budget to boost investors’ confidence.
“These measures will go a long way in boosting local investors’ confidence to take advantage of the many undervalued stocks in the market,” Uwaleke said.
He attributed the dominance of the bears in the stock market to heightening political tension and insecurity, particularly the clashes between herdsmen and farmers.
Uwaleke added that economic uncertainties from the delay in the implementation of the budget contributed to the trend.
“On the global scene is the spike in interest rates in the US and to some extent the US-China trade war which have combined to swing the attention of foreign investors to US markets,” he said.
He noted that the stock market had remained bearish despite the recovery of the price of oil, stable exchange rate, retreating inflation and even improved fundamentals of some quoted companies.
Uwaleke said the stock market would remain on a bearish trend this week, noting that there was nothing in particular to trigger a rally.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the political uncertainties had continued to affect investors’ confidence.
Omordion said the development had resulted to movement of funds from the equities market to other investment havens.
Consequently, NAN reports that the market capitalisation shed N286 billion or 2.11 per cent last week to close at N13.259 trillion against N13.545 trillion in the preceding week.
Also, the NSE All-Share Index which opened at 37,392.77 shed 789.33 points or 2.11 per cent to close at 36,603.44, amid price losses.
Linkage Assurance led the week’s gainers’ table in percentage terms, appreciating by 9.72 per cent or 7k to close at 79k per share.
Sovereign Trust Insurance followed with a gain of 8.70 per cent or 2k to close at 25k, while Cement Company of Northern Nigeria appreciated by 8.26 per cent or N1.90 to close at N24.90 per share.
Conversely, Union Diagnostic and Clinical Services topped the week’s losers’ chart in percentage terms, shedding 34.29 per cent or 12k to close at 33k per share.
Capital Oil trailed with a loss of 23.33 per cent or 7k to close at 23k, while Tantalizer was down by 22.22 per cent or 6k to close at 21k per share.
However, 1.67 billion shares worth N14.83 billion were transacted by investors in 18,795 deals.
This was against 1.22 billion shares valued at N17.33 billion exchanged in 17,362 deals in the preceding week.
The Financial Services Industry led the week’s activity chart with a turnover of 1.06 billion shares worth N10.22 billion traded in 10,056 deals.
The Services Industry followed with 264.29 million shares valued at N549.69 million in 592 deals.
The third place was occupied by Conglomerates Industry with a turnover of 134.37 million shares worth N199.57 million achieved in 1,286 deals.