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Following the reports of an interim government plot by the Department of State Services (DSS) on March 29, the stock market has trended downward for four days straight as a result of sell-pressure in some of the mid and large-capitalized stocks.
We report that this is as the overall market value of stocks traded at the floor of the Nigerian Exchange Limited (NGX) fell by N674.53 billion this week due to concerns about the interim government.
The alleged plot as gathered triggered investor sentiments in the capital market that the market’s total value dropped to N28.87 trillion on Thursday, April 6, from the N29.54 trillion that the market opened with on Monday, April 3.
It was learnt that a total turnover of 1.054 billion shares worth N10.05 billion in 16,155 deals was traded by investors.
Figures that are in contrast to a total of 2.071 billion shares valued at N17.562 billion that exchanged hands last week in 17,917 deals.
Movement of stocks showed that the NGX All-Share Index depreciated by 2.28 % to close the week at 52,994.13 basis points (bps), leaving the year-to-date return to decline to 3.40 % from 7.04 % last week.
Reacting to this development, the National Chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, told The ICIR that the uncertainty in the political space might be a trigger in the downtrend of the capital market.
He explained that “Let’s know the direction the economy will be moving that will give us the direction the market will head for now. The coast is not clear because the outgoing government is just standing still even when its presence has not even helped the market.
“After the election, we have begun to see pockets of killing here and there, and in the north.
“We continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook,” the analysts said, adding that in the week to come, they expected the “current trend of mixed sentiments to linger as the market seeks for a major catalyst that could trigger positive sentiments.”