Trading activities on the floor of Nigerian Stock Exchange (NSE) finished the first month of 2019 (January) on the negative trajectory with a record of N326 billion loss to close at N11.394 trillion in market capitalization as growing political tension takes toll on the equity market ahead of February 16 and March 2 elections. Some market analysts believed investors should trade cautiously in the short to medium term, as sell-offs are likely to persist, amidst the growing political and security tension of the general elections. Available statistics to New Telegraph showed that activities on the Exchange which opened the trading month at N11.720 trillion in market capitalisation and 31.430.50 in index points at the beginning of trading on January 2, 2019, closed the month on January 31, 2019 at N11.394 trillion and 30,557.20 index points, hence has earned a month to date loss of about N326 billion or -2.78 per cent.
The Chairman, Policy Committee of Manufacturers Association of Nigeria (MAN) Engr. Reginald Odiah, said that business investment has been on steady decline; stressing that it is a re-occurring phenomenon in the Nigerian polity. “This situation is persistent as there is no confidence in the Nigerian political structure which is marred with instability and policy inconsistencies. Over the last few months, market capitalization has continued to nosedive, and portfolio investors have consistently pulled out their investment. “This is not healthy for the economy, as you can see, all of these emanated as a result of the 2019 elections around the corner.
Every reasonable investor has to be sure that his investment is secured before staking his money in an economy like ours, and when you do not have such security, you just have to hold back you investment.” Odiah, who was also the former Chairman of Electrical Group of MAN, advised the government to assure investors of economic stability, to establish that election would come and go without the alteration of business cycle, especially on the policy aspect, as it affects the major players and manufacturers alike. Afrinvest (West Africa) Limited has said that it expect foreign investors to return to the Nigerian market after the conclusion of the elections and as such anticipate an improvement in performance in the equity market.
The Group Managing Director of Afrinvest, Ike Chioke, who stated this at the company’s 2019 Outlook for the Nigerian Economic and Financial Markets in a report titled, ‘On the Precipice’ also offered insights into the social, economic and political risks and potentials that will affect the growth of the economy in 2019 and beyond.