Nigeria Stock Exchange in Negative Downturn due to Investors Sentiment in the Economic Indices

 Proceedings on the floor of the Nigerian Stock Exchange (NSE) was hit with sell-offs mostly for the month of March 2021 as investors counted losses to the tune of N395 billion. This is against the N1.38 trillion recorded in February and despite analysts’ projections that full year (FY 2020) earnings from quoted companies would define the market theme for the month under review, stocks continued to depreciate in value.

Daily Sun analysis revealed that the All Share Index (ASI) which opened the trading month at 39,799.89 points (March 1, 2021) closed at 39,045.13 points while market capitalisation closed the month under review at N20.428 trillion from an opening value of N20.823 trillion.


Furthermore, the market’s year-to-date (YTD) loss worsened to -3.0 per cent. According to analysts who spoke to Daily Sun, the rising yields in the fixed income market weighed heavily on investors’ sentiment.

Speaking in an emailed note, Cordros Research, said it was no surprise that the performance of the equities market was negative as the month under review was characterized with investors shifting their focus on fixed income instruments.

“As the FY 2020 earnings season gradually fades away, we expect investors’ sentiment to be influenced by developments in the macroeconomic landscape and corporate actions. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings”.


Also commenting, Chief Executive Officer, Crane Securities, Mike Eze, attributed the negative performance to rising yields in fixed income securities as well as profit taking.

According to him, the month of April should be a positive outing as long as the government creates a level playing field for investors and tackles macroeconomic issues such as security, political atmosphere, exchange rates amongst others.


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