It appears a dumping competition is on for banking stocks as the “flexible exchange rate” euphoria begins to wane. The announcement last week by the CBN sent banking stocks in a frenzy as investors poured in to take position in anticipation of the implementation of the new policy.
The nation’s All Share Index fell 2.75 percent by the close in Lagos to 26,678.01, after it rose the highest last week for the first time in five months.
The NSE bank index was down 13.0 percent as traders await clarity on the central bank’s implementation of the flexible exchange rate policies.
Investors sold stocks as they see the impact of the Monetary Policy Committee (MPC) decision not materializing in the immediate.
Analysts say they don’t think people will take too much risk and they expect rising inflation and continued macroeconomic headwinds to dampen the mood of the market.
On the losers lists today are UBA, EcoBank and Zenith.
Latest figures from the National Bureau of Statistics (NBS) showed total trade balance as at the first quarter drop by 22.60 percent to N2.72 trillion. The steep decline in exports brought the country’s trade balance down –N184.1 billion.
Nigeria, Africa’s largest economy had GDP contract by 0.36 percent, the lowest since 2004. Emefiele said a delay in the budget passage has made a recession imminent and unavoidable.
“Ideological differences and reluctance to accept that market forces work is responsible for the economic slowdown,” said Bismarck Rewane, Chief Executive Director of Financial Derivatives Limited.
