Nigerian equities dropped the most in more than a year to enter a bear market as Brent crude prices plunged, weighing on Africa’s biggest economy and oil producer.
The Nigerian Stock Exchange All Share Index fell 4.1 percent to 22,550.83 by the close in in Lagos, the lowest level since July 2012. The measure is down more than 21 percent since the previous peak on Dec. 31, the worst performer among 93 global indexes tracked by Bloomberg this year.
Nigeria is struggling to cope with crude prices that have fallen to below $30 a barrel, while investors are holding off from pouring money back into the country until there is clarity over whether the currency will be devalued to compensate for the drop in oil revenue. With the backing of President Muhammadu Buhari, the central bank has restricted supplies of foreign currency, curbing growth and all but pegging the naira at 197-199 per dollar since March last year.
“The oil price is scaring’’ investors away, Lanre Buluro, head of research at Primera Africa Securities Ltd., said by phone from Lagos. There is also “no clarity on the exchange rate,’’ he said.
The slide in stocks comes only one trading day after the bourse introduced a circuit breaker on Jan. 15 to limit price swings. Trading on the Nigerian Stock Exchange will be stopped for 30 minutes if the All Share Index moves more than 5 percent from the previous day’s close between 10:15 a.m. and 1:45 p.m., the bourse said. The market will close for the day if the circuit breaker is triggered for a second time.
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