Not Russia, Greece, Ghana, or Venezuela but Nigeria!! We are stealing the headlines in the most notorious manner you can think about. Check out this excerpt from a Bloomberg article on Wednesday.
Nigerian stocks fell for the biggest three-day decline since August 2006 as oil prices traded near $50 a barrel and investors sold their holdings following a rally late last year.
The Nigerian Stock Exchange All Share Index retreated 4.2 percent (NGSEINDX) by the close in Lagos, the most among 93 global indexes tracked by Bloomberg. The gauge, down 16 percent in 2014, rose 20 percent between Dec. 17 and the end of the year as investors were attracted to the low prices, according to Ayodeji Ebo, head of research at Afrinvest West Africa Ltd.
Well, this is no surprise to as just like we had expected Nigerian stocks were poised for a bloody January. But to drop by 4.2% today after a huge 4.1% on Tuesday is a shocker to even the most pessimist of investors. This was basically a vicious combination panic, oil price drop and profit taking. Towards the end of December when stocks rallied we felt it was basically bargain hunters building a temporal boom that was bound to bust in a few days. So what happened? Holiday makers are back and have perhaps initiated sell orders that have sent the exchange plunging more than 10% in three days of trading. Unfortunately, this bearish room doesn’t look likely to end soon. For the wise out there, Cash is King!!