Investors Lost N464.3bn After FTSE Russell Downgraded Nigerian Stock Exchange

Investors in Nigeria’s capital market lost at least N464.3bn in a single day as the equities market reacted to the downgrade of the Nigerian Exchange Limited.

FTSE Russell, a global index issuer, downgraded the Nigerian Stock Exchange from “Frontline” to “Unclassified Market.”

FTSE Russells said NGX will be reclassified by September 18, 2023 which triggered immediate sell-offs that dragged market capitalization to N36.83trn.

The pressure eroded the gains made last week when the market closed on Friday, September 8, with N37.26trn capitalization.

Analysis by THE WHISTLER shows that the plunge led to N464.3bn loss on the part of investors.

The All-Share Index, which measures the general market movement of all listed equities fell by 1.2 per cent to 67,296.18 points as against the 0.91 per cent gains made last week resulting to the ASI to closing 68,143.34 on Friday.

The UK-based firm said Nigeria’s foreign exchange crunch has made it difficult for investors to repatriate funds and proceeds of investment in the capital market.

“As index changes for Nigeria within FTSE Russell equity indices have been suspended since September 2022 and with no improvement in the ability of international investors to repatriate capital at a foreign exchange rate that would be used in FTSE Russell equity indices, following the reclassification of FTSE Russell equity indices Governance Board, FTSE Russell announces that the FTSE Equity Country Classification status of Nigeria will be downgraded from frontier to unclassified market statues, with Nigerian index constituents deleted at zero value (0.0001 NGN) from the following FTSE Rusell equity indices,” FTSE Russell said.

The delisted indices are: FTSE Frontier Index Series, including FTSE Frontier 50 Index; FTSE IdesRatings Islamic Index Series; FTSE/JSE All Africa Index Series; FTSE Middle East& Africa Extended Index Series and FTSE/MV Exchange Index.

The announcement led to selloff pressures in Guarantee Trust Bank Plc (GTCO) which share price fell 8.6 per cent from N38.85 per share to N35.5; Dangote Sugar Plc shares fell 10 per cent from N 64.15 to N57.75 per share while Zenith Bank Plc shares also fell 5.8 per cent from N 36.95 to N34.8.

Access Holdings Plc shares fell 8.57 per cent from N17.5 per share on Friday to N16 per share while Nigerian Aviation Handling Company Plc (NAHCO) shares fell from N25.45 per share to N23.