According to market operators and analysts, the huge loss suffered by the investors is largely due to the lack of clear policy direction by the current government, the protracted delay in appointing ministers and other negative developments in the economy.
These, they said, included the foreign exchange controls put in place by the Central Bank of Nigeria, the decision of JPMorgan to remove Nigeria from its government bond index, and the declining Gross Domestic Product growth.
Meanwhile, hopes that the appointment of ministers by the President will help halt the losses and spur the recovery of the stock market have started to fade, with investors unimpressed by the list of ministerial nominees.
Rather than the positive reaction that greeted the declaration of Buhari as winner of the presidential election and the appointment of Mr. Ibe Kachukwu as group managing director of the Nigerian National Petroleum Corporation, the market has reacted negatively to the ministerial list.
The stock market had risen by N904bn or 8.4 per cent, its biggest rise in a day, on April 1, the day after Buhari was returned as winner of the election, and it rose for four straight days after Kachukwu’s appointment.
Capital market operators and analysts had hoped for a similar reaction with the release of the first batch of nominees for ministerial appointments after a four-month wait during which foreign and some Nigerian investors, who had exited the market due to the uncertainties surrounding the elections and subsequently the economic policy direction of the new government, stayed away.
However, since Wednesday last week, when the ministerial list was sent to the Senate, the stock market had closed on a negative note, with the market capitalisation declining by N377bn or 3.51 per cent in five trading days.
(Punch)
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