Nigerian Stocks Plunge 16% Since December

Stocks quoted on the Nigerian stock market has dropped by 16 per cent since December 2015, even as the Central Bank of Nigeria, CBN says that weakening the naira would raise inflation, already close to 10 per cent, Control Risks Services West Africa has disclosed.

Commenting the impact of devaluation on business environment, Control Risk stated “Uncertainty about the timing and extent of any devaluation will remain a significant risk, particularly those whose operations rely on large quantities of imported goods, as well as to investors and prospective investors.

Many potential investors are likely to stay shy of Nigeria until the fears surrounding the possible devaluation of the currency have been alleviated. File photo: The floor of Stock exchange Continuing, it said.

“As assets in Nigeria continue to slide in value, investors who are prepared to take a longer term perspective will find there are buying opportunities.”

Daniel Magnowski, Senior Analyst, Control Risks said: “A lot more clarity is needed about Nigeria’s Fiscal and monetary policies before people regain the confidence to invest.”

According to him “Meanwhile, the central bank says that weakening the naira would raise the inflation rate, already close to 10%. Nigerian stocks have fallen 16% since the end of December 2015, the biggest drop in sub-Saharan Africa.” Commenting further on devaluation, he said.

“After falling to a record low of N390 to the US dollar on 18 February the naira (currency)’s gained value on the black market this week to trade at around 364 to the dollar.”