Stock market investors have lost over N2.3 trillion barely three weeks after the first case of coronavirus, which is currently ravaging the whole world, was confirmed in Nigeria on January 28, 2020.
Specifically, the market capitalisation of listed equities, which stood at N13.657 trillion as at Friday, February 28, 2020 depreciated by N2.349 trillion to N11.308 trillion yesterday, while the All-share index which measures the performance of quoted companies closed at 21,700.98 from 26,216.46 representing 4,515.48 points or 20.8 per cent drop.
Nigeria has recorded fewer confirmed cases of Covid-19, when compared to other countries, but the global pandemic’s impact on the economy is far more significant.
While global oil demand drops drastically in the wake of the outbreak, Nigeria’s economy is being caught in the crossfire.
Essentially, with oil being Nigeria’s biggest export; the government relies heavily on the resource for dollar earnings to fund its national budget.
More so, the Central Bank of Nigeria (CBN) last week Friday officially devalued the Naira to N380 to a dollar. All these, coupled with other perennial issues bedevilling the nation’s capital market hitherto have eroded investors’ confidence in the market.
Recall that the equities market defied New Year trends as the performance indices of the market (the All-share index and market capitalisation) rose significantly for one week, from January 2, 2020, the first trading day of the year.
The rally caused the value of listed equities to increase by over N816 billion or 5.9 per cent within five days, while cumulative value of listed equities rose to N13.787 trillion as at January 8, 2020 from N12.971 trillion at the beginning of the year