By Omobayo Azeez
Investors in the Nigerian stock market recorded massive loss on their investment after activities on Monday ended with N329 billion loss to commence a new week.
The decline was ascribed to fear arising from an oil price war staged by Saudi Arabia against Russia in the international oil market which has caused the oil price in the global space to tumble by as much as much 31 per cent.
This sent wrong signals to investors globally as the oil remains one of key global economic determinants with concomitant effects on investor sentiments.
The situation became compounded with the continuous spread of coronavirus case which has held the global equities market to ransom since it broke out late last year, worsening returns on many global equity markets to sink deeper in the red territory.
As the Nigerian Stock Exchange (NSE) closed on Monday, the All-Share Index (ASI) dipped by 591 basis points or 2.4 per cent to close at 25,647.54 basis points.
Market capitalisation of equities followed suit by depreciating from N13.69 trillion on Friday to N13.365 trillion after the fresh decline recorded on Monday.
As the NSE’s composite index fell by 2.4 per cent after they day’s session, the Month-to-Date (MtD) return became negative at -2.2 per cent while year-to-date (YtD) worsened to loss to -4.5 per cent.
The total volume of trades also decreased by 48.6 per cent to 185.65 million units, valued at N1.83 billion and exchanged hands in 2,690 deals.
It was also a day for the bears as only one stock closed positive during the session while 39 closed in the red territory.
Meanwhile, the NSE was not alone in the downtrend as Reuters reports showed that European markets suffered hefty losses in early trade with London dropping more than eight per cent, Frankfurt falling more than seven per cent and Paris almost matching those losses.
The pan-regional STOXX 600 tumbled into bear market territory — a drop of more than 20 per cent from recent peaks. Oil stocks suffered massive losses with Tullow down 57 per cent and BP down 27 per cent in early trade.
In Asia, stocks and emerging market currencies with exposure to oil tumbled in volatile trade while the safe-haven yen surged.
Analysts said that the staggering depreciation in oil prices could not have come at a more disruptive and critical time for the Nigerian economy.
Energy January 16, 2020