It’s a massive sell off on the exchange already with the NSE losing 4% by mid day trading. Reports suggest massive sell orders have been placed by foreigners who are moving their cash out of Nigeria in droves.
The exchange is now down to its lowest in two years and is likely to dip further. In fact if the losses continue down 5%, trading many just be suspended across board.
This is not good times for the economy as even naira has been depreciating. As foreigners sell equities they basically repatriate in dollars putting so much pressure on the Naira. This is all reminiscent of the Asian crisis in the 90’s when hot money flowed out of Malaysia, Indonesia etc as foreign portfolio investment flowed out.
While this may not be the case just yet it’s going to be interesting to see how the NSE reacts to this. Over the years they had introduced buffers such as market makers, gauge on FPIs amongst others to control the flow of equity. Local to foreign portfolio inflow had averaged 40% to 60% at most points in the year suggesting we could withstand. Now it appears market resistance is in tatters as investors flee out of fear and panic.
![[The Nigerian Economy Daily] FG has approved the closure of five foreign missions and embassies](https://nairametrics.com/wp-content/uploads/2017/05/nigerian-economy-today-1.jpg)
