If you are a regular reader of this blog, then by now you should have a good idea of why the stock market faired badly in 2014. The issues were glaring and one hopes we never see the repeat of this again. The Nigerian stock exchange has now released an official recap of the Nigerian stock market in 2014. The interesting report highlighted the following reasons officially sighted as the cause of the 2014 bearish market. Here they are;
In the capital market, bearish sentiments prevailed for most of the year as foreign investors steadily withdrew from the Nigerian market, due to currency risk and the recovery of developed economies, and the effects of the US Federal Reserve tapering of its quantitative easing (QE) policy. Several macroeconomic developments also contributed to the decline in market performance. These were:
(i) fall in crude oil prices and related pressure on the Naira
(ii) the impact of CBN’s monetary policy changes introduced at various points throughout the year
(iii) Nigeria’s declining foreign reserves
(iv) festering insurgency in the north
(v) uncertainty around the upcoming 2015 elections
(vi) weak corporate earnings.
The air of uncertainty that hovered over the Nigerian capital market throughout 2014 caused investors to increasingly adopt a ‘flight to quality’ strategy
This is the full Nigerian Stock Exchange 2014 Market Recap
