[Bloody week] Why Nigerian Stocks Skidded into Losses

Last week was a bloody week for the All Share Index as stocks skidded into losses pulling the index lower by 0.96%. All Sub-Indexes lost except the Oil and Gas and Industrial Index which both gained 2.27% and 0.13% respectively. The NSE 30 Index of most capitalised stocks took the most pounding as it lost 15.6%.

Thirty-three (33) equities appreciated in price during the week, higher than twenty-two (22) equities of the preceding week. Thirty-six (36) equities depreciated in price, lower than fifty-four (54) equities of the preceding week, while one hundred and twenty-four (124) equities remained unchanged, higher than one hundred and seventeen (117) equities recorded in the preceding week.

The reason for the poor performance was mostly attributed to the effects of the CBN circular that banned about 41 items from accessing the official FX markets. This widened the premium between the parallel and interbank FX rates. This stoked up calls for a further devaluation by most analysts thus putting pressure on stocks. Most opine these fears have caused most investors to sell down their holding thus ushering in a prolonged bearishness that has affected most blue chip stocks.