Investors in Nigerian Stock market lost N2trn in first three months of 2020

The market value of all listed companies in the Nigerian Stock market, lost about N2 trillion between January and March of 2020. As a result equities listed in the stock market suffered high price volatility during the period. This can be traced as a result of the impact of the Coronavirus (COVID-19) pandemic, as well as the crash in global oil prices. The Nigerian Stock market value dropped by N1.87 trillion to close the period under review at N11.1 trillion from N12.971 trillion. The All-Share Index (ASI) also dropped by 20.73 per cent to close Q1 2020 at 26,867.79 points.

The NSE’s sectorial performances were also negative, as all indexes closed the period with a drop in value. The NSE Consumer Goods Index plunged the most by 44.84 per cent while the NSE Banking Index followed with a decline of 30.64 per cent. Also, the NSE 30 index lost 23.03 per cent in value. “NSE in 2019 Foreign portfolio transactions drop by N280 billion as foreign investors remain net sellers of Nigerian equities , 2020 Nigerian Equities Outlook: Breaking the Jinx?, Equities: Foreign investors remain net sellers for second consecutive year , Investors part with N152.1 billion as bearish trade extends, Stocks close February in deep red as investment options dry up for Nigerians, Economy: Domestic investors hold sway in January” 

Meanwhile, Nigeria’s most important commodity (i.e., crude oil), registered its worst quarterly performance in the first 3 months of the year. This is due to the COVID-19 pandemic which has continued to weaken global oil demand.

Records show that prices of Brent Crude oil dropped by almost 65 per cent during the first three months of 2020, registering its worst quarter ever. Brent Crude also recorded its worst-ever monthly performance in March, falling over 54 per cent. Furthermore, WTI Crude fell more than 66 per cent in the first quarter of 2020, recording also its worst-ever quarterly performance since its inception in 1983. WTI futures plunged over 54 per cent last month, registering its worst-ever monthly performance.

Capital outflow from emerging and frontier markets like Nigeria is being looked at from the perspective of impending global recession. This is according to the benchmark indexes of many global stocks markets show. The market outlook remains unstable during this lockdown period and beyond, due to the notably high volatility in developed and developing markets.