Post-election apathy, liquidity shortfall pare investors’ fortune

A significant shortfall in availability of cash at the disposal of money market operators, occasioned by increased post-election apathy, has continued to fuel persistent sell pressure on the equities sector of the Nigerian Stock Exchange (NSE), causing investors’ wealth  to plunge further by 2.5 per cent as at Friday.
 
A review of market performance last week showed that all the indices closed lower, a development, which is currently constraining efforts to restore confidence in the nation’s bourse.
 
For instance, at the close of transactions last week Monday, the bears strengthened their grip, as the All-Share Index (ASI) plunged further by 0.9 per cent despite improved corporate performances.

The downturn was caused by majority of the same group of large and medium capitalised stocks like Nestle Nigeria, Dangote Cement, Transcorp Hotel, Eterna and Guaranty Trust Bank.

Analysts, at the weekend, attributed the lull to low liquidity, mixed earnings and outcome of the just concluded general elections, which observers say have come below expectations.
 
Chief among pointers to support their claim is that the governorship elections in all of six out of 29 states were declared inconclusive.
 
The Chief Research Officer of Investdata Consulting, Ambrose Omodion, said: “The prevailing negative sentiments started again after the 2018 lull situation that extended to early January, but reversed on inflow from smart money that took position ahead of the presidential polls, which outcome was against their expectation. 
 
“This triggered their quick exit as reflected in the average traded volume and money flow index that have been declining since the re-election of President Muhammadu Buhari, despite the ongoing earnings season.

 
“One cannot also, ignores the expiration of Central Bank of Nigeria Governor, Godwin Emefiele on June 3, as investors are anxious to know who the replacement could likely be.”