The Nigerian Stock Exchange (NSE) is falling from its glorious ranking of last year, steadily becoming one of the ‘worst performing’ in Africa year to date. The drastic decline has been associated with the prevalent political tensions and uncertainties in Nigeria, ahead of the country’s presidential, gubernatorial and senatorial polls scheduled for early 2019.
Explaining the situation, the CEO of Cowry Asset Management, Mr Johnson Chukwu, said none of the other current well-performing countries is experiencing any political issues.
“The earlier part of this year witnessed a lot rumbling in the ruling party, which scared foreign investors away from the market. So, 2018 is completely different from 2017 because 2018 is almost an election year because it precedes a national election with a lot attention now focused on political activities, leading to heightened political risk, which investors are shying away from. That is why also the equities market has not done well in 2018.” – Chukwu
Last year, the Nigerian bourse recorded nearly 50% returns on investments to investors. As a result, it was ranked the best performing bourse on the African continent and the third best in the entire world. Unfortunately, this is not the case in 2018.
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Year to date, the NSE All Share Index (ASI) has declined by 10.01%. This is slightly better than the 11.1% decline recorded by BVRM (“Regional Securities Exchange”), which serves such Francophone West African countries as Cote d’Ivoire, Mali, Togo, Benin Republic, Senegal, etc.
The Morocco Stock Exchange is the third worse performing in Africa with a 7.1% decline year to date. Finally, the Johannesburg Stock Exchange (JSE) also declined by 1.3%, thereby ranking as the fourth worse performing on the continent.
Meanwhile, the Tunis Stock Exchange (TSE) is currently the best performing in Africa, having risen 33.4% year to date. Other well-performing bourses around the continent are the Zimbabwe Stock Exchange (21.8%) and Ghana Stock Exchange (7.9%).