Nigeria’s Stock Market Records First Weekly Fall Of 2024 Amidst Forex Crisis

A drop in equity purchases by local and foreign investors has pushed the stock market down by 2.45 per cent, signalling the first weekly drop since the start of the year.

An analysis of the data from the Nigerian Exchange Ltd (NGX) by THEWHISTLER shows a drastic drop in the value and volume of the shares traded in the week ended Friday, February 9, 2024.

Last week Friday, February 2, 2024, 3.893 billion shares worth N95.147bn in 69,117 deals were traded, but the momentum dropped with only 2.478 billion shares worth N47.856bn in 54,982 deals traded during the week.

The apathy dragged the NGX All-Share Index to depreciate by 2.45 per cent and settle at 101,858.37 points while the Market Capitalisation which measures the total value of all the shares listed on NGX dropped by 2.49 per cent to close the week at N55.74tn.

All other indices finished lower except NGX ASeM which appreciated by 4.63 per cent. The NGX-ASeM index tracks the performance of listed companies in sectors such as technology, healthcare, education, and renewable energy.

Foreign Portfolio Investors (FPIs) invested over $1bn in the last few days on stocks and other assets, according to the Central Bank of Nigeria Governor, Olayemi Cardoso, but their investments could not save the stock market during the week.

The biggest fall was recorded by the NGX MERI Growth Index which dropped by 8.67 pe cent; the NGX-AFR Bank Value Index plunged by 6.9 per cent; the NGX Banking Index fell by 6.86 per cent and the NGX CG Index fell by 5.24 per cent.

Both fiscal and monetary authorities in Nigeria are seeking measures to reset the economy as a hub for investment. The CBN is test-running policies that will allow FPIs and other investors to repatriate their funds at will.

The dollar crunch has scared FPIs from the country and its stock market.

A report published by the NGX said foreign transactions decreased by 32.92 per cent from N71.37bn ($75.76m) to N47.87bn (about $53.26m) between November 2023 and December 2023.

But last week, the CBN boss, Cardoso told a joint committee of the House of Representatives that FPIs have begun to indicate strong interest in the Nigerian market.

“Nigeria is going in the direction that many investors want to see it go. As the confidence comes back and their money starts coming in, which I see happening, volatility begins to reduce. The wide swings you have been seeing in the foreign exchange market begin to reduce, and I believe very strongly that the volatility will reduce and the foreign exchange market will stabilise.

“Today, I will say that we have a situation where a lot of foreign portfolio investors are very interested in coming back to the Nigerian market. It is incredible, and if there is any group that has taken an interest, very methodically may I say, it is the foreign portfolio Investors,” Cardoso told legislators.

On the stock market, the share prices of 20 companies appreciated during the week, but it was lower than 27 equities in the previous week.

A total of 68 companies depreciated in price, which exceeds the 64 companies in the previous week, while the share prices of 66 companies remained unchanged.