The Nigerian stock market lost more than N1.63 trillion in January due to profit-taking and currency volatility, statistics from the Nigerian Stock Exchange (NSE) showed on Thursday.
The News Agency of Nigeria (NAN) reported that the drop represented a 16.50 per cent to close at N8.225 trillion from the N9.850 trillion in December.
Also, the All-Share Index decreased by 4726.10 points or 16.50 per cent to close for the month at 23,916.15 against 28,642.25 posted in December.
The volume of shares traded also declined by 5.67 billion shares worth N42.05 billion traded in 67,479 deals from the 7.23 billion shares valued N55.28 billion transacted in 53,414 deals in December.
The decline represented 21.58 per cent.
The financial services sector remained the toast of investors during the period, accounting for 3.87 billion shares worth N16.93 billion traded in 27,065 deals.
Chief Operating Officer, InvestData Consulting Limited, Mr. Ambrose Omordion, attributed the downward trend to the lingering instability in the global equity market.
Omordion said the market might oscillate before the end of the month when investors would reposition for companies’ reports for dividend payouts.
He said traders and investors should target good companies with sound fundamentals and earning capabilities to pay dividend.
“This is the time to effectively combine technical and fundamental analysis for investment decision,” he said.
Head, Research Unit, United Capital Plc, Mr. Kayode Tinuoye, called for increased local investors’ participation in the nation’s bourse to help mitigate the impact of external portfolio shocks.
Tinuoye said the dominance of foreign participation in the market in the past four years led to the capital market negative reaction to the global shocks.
He said market volatility and sell pressure were driven by capital flight.
Tinuoye added that there was need for increased local participation to insulate the domestic market from external shocks and currency volatility.
