Shocking! Nigerian Stock Market Crashes, Wipes Out N91 Billion in a Single Month - What's Next for Investors?
Friday 29 September 2023
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Shocking! Nigerian Stock Market Crashes, Wipes Out N91 Billion in a Single Month - What's Next for Investors?
In a jaw-dropping turn of events, the Nigerian stock market took a heavy blow in September, plummeting by 0.25 percent and erasing a staggering N91 billion in just one month. This alarming decline came as a bolt from the blue following a promising rally throughout August, leaving investors in a state of shock and apprehension.
As September began, the All-Share Index (ASI) stood at a seemingly robust 66,548.99 points, with the equities market capitalization sitting comfortably at N36.422 trillion. Yet, by the time the month drew to a close, these figures had dwindled to 66,382.14 points and N36.331 trillion, respectively. The market's descent into bearish territory was swift and ruthless. CONTINUE READING.........
What makes this decline even more bewildering is that it occurred against the backdrop of expectations that investors would seize the opportunity to position themselves in value stocks ahead of the half-year (H1) interim dividend qualification. However, the reality proved to be starkly different, with investors exhibiting a high degree of caution.
The primary culprit behind this unanticipated turn of events is the precarious state of Nigeria's macroeconomic landscape, with a particular focus on developments in the foreign exchange (FX) market. The FX market's fluctuations have a direct and profound impact on foreign investments in Nigerian stocks, making it a major source of concern for investors. CONTINUE READING........
In stark contrast to the remarkable 3.44 percent return observed in the previous month of August, September's dismal performance has left many scratching their heads. Market analysts from Vetiva Research in Lagos have soberly noted, "With no positive drivers in the market, we anticipate similar mixed trading sessions in the coming weeks as investors await third-quarter (Q3) earnings reports."
Despite the gut-wrenching losses experienced by investors in September, it's crucial to remember that the market still holds a positive return of +29.52 percent for the year through September. However, this alarming month-end slump serves as a stark reminder of the ever-fluid and unpredictable nature of the Nigerian equities market.
Investors will undoubtedly be on the edge of their seats in the coming weeks as they eagerly await the release of Q3 earnings reports, desperately hoping for a turnaround and a more favorable market climate. The question on everyone's mind now is, "What's next for investors?" Stay tuned as we closely monitor this unfolding financial drama.
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