- The Nigerian equities market gained N277 billion in the last two weeks despite the plan by JP Morgan to remove Nigeria from its Government Bond Index (GBI-EM) by the end of the year. Although the threat directly affects the bonds market, there were apprehensions that the equities market would also suffer. This situation led to an initial panic selling among equity investors.
- However, the market recovered quickly as some investors swooped on highly discounted equities. As a result, the market gained N277 billion, rising from N10.148 trillion to N10.425 trillion in two weeks. The market added N42 billion in the first week when JP Morgan made the announcement and gained N225 billion last week.
- Some market operators said despite the initial threat, discerning investors see a lot of value in the Nigerian equities market, adding that the fundamentals of many of the companies remain strong.
Apart from the fact that the equities market boasts of hidden value, investors are taking position ahead of the positive impact the announcement of federal cabinet before the end of this month would have on the market. Also, the assurance given by the Central Bank of Nigeria(CBN) helped to calm the frayed nerves of many investors who decided to return to the market,” a stockbroker said.
- The CBN Governor, Mr. Godwin Emefiele, had last week assured jittery investors that the central bank was “doing everything possible” to ensure that the country remained on the JP Morgan Index in order to avoid the adverse consequences which the country’s exclusion could cause.