The postponement of the general elections has heightened anxiety and dampened investors’interest in Nigerian equities, analysts have said.
The presidential and national assembly elections initially scheduled for Saturday, February 14 were shifted to March 28; the governorship and Houses of Assembly elections scheduled for February 28 were shifted to April 11. In the first trading session after the shift, Nigerian equities on Monday lost N208 billion.
Analysts said the postponed elections could trigger negative reactions from investors, adding that the consequent disruptions could worsen the negative streak in the stock market.
The market opened with average year-to-date return of -13.48 per cent. Before the poll shift, the market had sustained appreciable rally to close the week with average week-on-week gain of 1.43 per cent.
Analysts at Afrinvest Securities Limited, said the shift could lead to a decline in investors’ preference for Nigerian equities.
Accordingly, the market may likely react negatively to the shift in the general elections by six weeks.
Analysts noted that although the shift may lead to relaxation in the charged political atmosphere, “the poll-shift has further increased socio-political uncertainty, adding to the risk profile of the Nigerian stock market”.
Analysts said they however, did not expect a knee-jerk negative response given the current market situation at the stock market where most equities are significantly trading below their intrinsic values.
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