The loss suffered in equities by investors within a month after Nigeria recorded its first confirmed case of Coronavirus (COVID-19) was put at N2.56 trillion on Tuesday.
As the country contend with rising cases of COVID-19, investors scurried for the exit, creating a buyer’s market that saw most transactions closing at significantly lower prices.
The benchmark indices for the equities market indicated average decline of 18.75 per cent in March, equivalent to net capital depreciation of N2.56 trillion.
The aggregate market value of all quoted equities at the Nigerian Stock Exchange (NSE) dropped from the March’s opening value of N13.658 trillion to close yesterday at N11.101 trillion.
The All Share Index (ASI) – which tracks all share prices at the Exchange, also declined from the month’s opening index of 26,216.46 points to close March at 21,300.47 points.
With the steep decline in March, the three-month average year-to-date return for the Nigerian equities market closed the first quarter at -20.7 per cent, equivalent to net loss of N2.68 trillion.
This implies that investors in the Nigerian stock market had lost more than one-fifth of their portfolios in the first three months of the year.
The ASI opened the year at 26,842.07 points while the aggregate market value opened at N12.958 trillion. The sectoral indices for the first quarter showed that most investors had suffered above-average losses.
The performance of the market last month was the worst in recent period but most analysts said they expected the bearishness to continue as Nigeria struggles with external shocks of falling crude oil price and domestic containment of spreading COVID-19 pandemic.
“We expect the bearish sentiment to continue however, there exist bargain hunting opportunities in the equities market,” Afrinvest Securities stated yesterday.
Investors in Nigerian equities had lost N1.35 trillion in February with average decline of 9.11 per cent, counterbalancing net capital gain of N966.7 billion that accrued in January 2020.
Capital market experts agreed that COVID-19 has started impacting the market and the general economy, as the market serves as barometer for the economy.
Pundits agreed that the extent of the impact depends on the duration of the restrictions or lock down, the containment strategy and government’s economic recovery strategy. Despite the stimulus packages for companies in the healthcare sector, not a few analysts agreed that Coronavirus will have a generally negative impact on the capital market and the economy.
Email us @ info[at]nigerians.news