The market capitalisation of the Nigerian Stock Exchange (NSE), which represents the market value of all listed companies, lost about N2 trillion in the first quarter of 2020.
Nigerian equities suffered high price volatility during the period under review. This happened as a result of the impact of the Coronavirus (COVID-19) pandemic, as well as the crash in global oil prices.
The Details: The Nigerian bourse’s market value dropped by N1.87 trillion to close the period under review at N11.1 trillion from N12.971 trillion. The Nigerian All-Share Index (ASI) also dropped by 20.73% to close Q1 2020 at 26,867.79 points.
Do note that the ASI is the overall market performance measure which monitors the general market movement of all listed equities on the NSE.
Performance by sectors: The NSE’s sectorial performances were also negative, as all indexes closed the period with a drop in value. The NSE Consumer Goods Index plunged the most by 44.84% while the NSE Banking Index followed with a decline of 30.64%. Also, the NSE 30 index lost 23.03% in value.
Meanwhile, Nigeria’s most important commodity (i.e., crude oil), registered its worst quarterly performance in the first 3 months of the year. This is due to the COVID-19 pandemic which has continued to weaken global oil demand.
Records show that Brent Crude plunged more than 65% during the first three months of 2020, registering its worst-ever quarter. Brent Crude also recorded its worst-ever monthly performance in March, falling over 54%.
Furthermore, WTI Crude fell more than 66% in the first quarter of 2020, recording its worst-ever quarterly performance since its inception in 1983. WTI futures also plunged over 54% last month, registering its worst-ever monthly performance.
Finally, the ongoing capital outflow from emerging and frontier markets like Nigeria has been attributed to the imminent global recession. This is according to the benchmark indexes of many global stocks markets show.
In the meantime, the market outlook remains unstable during this lockdown period and beyond, due to the notably high volatility in developed and developing markets. The seeming positive sentiment on quarter-end window dressing and the bouquet of stimulus packages have so far been unable to support the market.