Foreign investors sold off Nigerian stocks valued at 846.5 billion naira ($4.5 billion) last year, Reuters news agency said citing stock exchange data today. The shares sell off, 65 percent more than in 2013, was caused by several factors including the slump in oil prices and the naira crisis as well as the boko haram insurgency in the country’s northeast and the political tension brought on by the 2015 national elections.
Foreign Investors Withdrew $4.5bn From Nigeria’s Stock Market In 2014 – Reuters
Reuters said Nigeria’s main share index shed 16 percent in 2014 and has fallen 14.7 percent so far this year. Top decliners this year include Dangote Cement, which accounts for a third of market capitalisation, down 22 percent, and Transcorp down 13 percent, the agency said.”Foreign investors increased the pace of stock market outflows from September, selling out of the relatively liquid banking, consumer and oil sectors as the price of Brent crude, the benchmark against which Nigeria’s oil is priced, slumped.”
Nigeria is Africa’s largest economy and top exporter of oil, but its dependency on the commodity, which contributes about about 80 percent of government spending, means the country will go through a very tough time this year because of the 60 percent drop in price since June last year and steady decline in crude production. According to the NBS, production stood at 2.26 million barrels a day in the first quarter of last year and 2.15 million barrels per day by the third quarter.
In November, the Central Bank devalued the currency by 8 percent in a bid to halt the decline in its foreign exchange reserves. Despite the devaluation, the naira has hit record lows against the dollar since this year, opening at 190.50 to the dollar on Monday. Nigeria’s foreign reserves dropped to $34 billion by January 28, down 20 percent from a year ago.
Previous PostPatience Jonathan reacts to alleged N3b bribe from NNDC Next PostGenesis Cinema, Play Zone, Come To City Mall Onikan