Capital Market: Q3 Ends Negative On Nigerian Stock Exchange

Contrary to the bright outlook projected by analysts for 2014, the market ended the Q3 of 2014 on negative note, on the back of reduced foreign participation and weakened demand by domestic investors due to developments in the financial, political and global environments negative to growth of the market.

The impact of the hike in the cash reserve ratio (CRR) on public sector funds and the increase in capital requirement of Bureau de Change (BDC) operators from N10m to N35m and the increase in their mandatory caution fee from USD10,000 to N35m, The Street Journal gathered, impacted liquidity squeeze on the economy and affected the performance of the market negatively.

The market also suffered from the increase in political risk as indicated by the various security challenges facing the country. The insecurity in Nigeria, especially the boko haram insurgency in the northern part of the country is impacting on the market negatively as both Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI) into the country dwindles.

Nigeria’s fiscal situation has equally not inspired confidence in investors, which is highlighted by Standard & Poor’s revision of the country’s credit outlook to ‘negative’ from ‘stable’.


However, Sell Pressure intensified today as market closed with 0.32% loss.
Trading activities on the Nigerian stock exchange decreased by 65.23% as investors bought 242.96 million shares worth N2.68 billion, in 5,169.00 deals, compared to 698.84 million shares worth N6.07 billion, in 4,833.00 deals exchanged on Thursday. Ikeja Hotel Plc, Sterling Bank Plc and Transcorp Plc were the most actively traded stocks on the exchange today in terms of volume, while Zenith Bank Plc and Oando Plc, topped in terms of value. More on The Wall Street Journal