- The sharp decline in Nigerian Stock Exchange (NSE) market has triggered both economic and political tension in the country
- The NSE which used to be the best in Africa as at 2017, is now the worst in the continent according to economic analysts
- It was ranked the third best globally in 2017 by Cable Network News (CNN) after an amazing 48 percent return on investments the same year
The rather disturbing political situations in Nigeria with some negative economic statistics have had a serious impact on the competitiveness of Nigeria’s stock market, leading to the crash of the ranking of the Nigerian Stock Exchange (NSE) to the worst performing in Africa 2018, after it was rated the best performing in Africa in 2017, Vanguard reports.
The NSE was also formerly ranked the third best globally in 2017 by ‘CNN Money’ after recording an awesome 48% returns on investments the same year, until on Tuesday, September 4, analyses revealed that the exchange All Share Index, ASI, fell by -11.3 percent.
The weekly pan-African stock market monitor by United Capital Plc, a Lagos based investment house, which built the statistics indicated that BVRM (“Regional Securities Exchange) was the second worst performing stock market in Africa with a negative return of -11.1%.
BVRM covers Francophone West Africa’s weaker economies including Benin Republic, Burkina Faso, Guinea Bissau, Cote d’Ivoire, Mali, Niger, Senegal and Togo.
The analysts listed Morocco Stock Exchange as the third performing with -7.1 percent negative return. South Africa, competing for leadership position amongst African economies by size, also had its bourse, the Johannesburg Stock Exchange (JSE), going down, but was better of with a -1.3 percent negative return.
Meanwhile, the Tunis Stock Exchange (TSE) came ahead of other major exchanges with its 33.4 % rise during the eight-month period. The next is the Zimbabwe Stock Exchange (ZSE), and Ghana Stock Exchange (GSE) which rose by 21.8 % and 7.9% respectively.
Speaking about the woeful performance of the NSE, Johnson Chukwu, the managing director and the chief executive officer of Cowry Asset Management, a Lagos-based investment banking company, said that the major constrictive factor that led to weak performance of the Nigeria equities market is the current political situation
Chukwu said that none of the nations that outperformed the NSE is going through a national election tension.
Chukwu said: “The earlier part of this year witnessed a lot rumbling in the ruling party, which scared foreign investors away from the market. So, 2018 is completely different from 2017 because 2018 is almost an election year because it precedes a national election with a lot attention now focused on political activities, leading to heightened political risk, which investors are shying away from.
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"That is why also the equities market has not done well in 2018. So, it has to do with political risk in addition to some economic factors such as the normalisation of interest rate in the United States of America, increase in yield in the United Kingdom and even the normalisation of monetary policy by the European central bank and Japanese central bank.”
Meanwhile, Legit.ng reported that Nigeria's former president Olusegun Obasanjo, on Saturday, June 29, expressed worry that if not adequately dealt with corruption will eat up more than 30% of Nigeria’s Gross Domestic Product, eventually.
Legit.ng gathered that the former president added that Africans should look inward and anchor on value reorientation, respectfulness, obedience and hard work if the continent must rise above its challenges.
EXCLUSIVE: Be patient with President Buhari, Femi Adesina tells Nigerians - On Legit.ng TV