Between August 1 and October 31, 2022, investors who made their money on the Nigerian Exchange Limited’s trading floor lost N3.28 trillion.
By October 31, 2022, the market capitalization of the trading activities had decreased from N27.163 trillion when it opened in August to N23.88 trillion, a 12.09 percent decline, or N3.28 trillion.
As a result of aggressive profit-taking by investors in Airtel Africa and Dangote Cement Plc, the stock market declined by N2.57 trillion in October, according to the breakdown, and by N430 billion in September.
In August, the market suffered a N283 billion loss.
As a result, the NSE All Share Index, which gauges the overall performance of all listed stocks, lost 12.24% to close at 49,024.16 basis points on October 31, 2022 as opposed to 49,950.32 basis points on August 1, 2022.
Further research showed that the share price of Airtel Africa fell by N630.40, or 33.08 percent, to N1,275.00 per share in the past three months from N1,905.40 per share in August, and the share price of Dangote Cement fell by 16.8 percent, or N44.5, to N220.50 per share in the same period from N265 per share.
The capital market wouldn’t function in isolation, according to a capital market analyst who spoke about the bearish performance throughout the review period.
The President of PEARL Awards, Mr. Tayo Orekoya, stated in a media interview that the constant rise in benchmark interest rates was the main cause of the current depreciation.
According to him, “One major factor that has contributed to losses is the increase in the Monetary Policy Rate. The rates by the central bank were increased in May. It was 13 per cent by July 2014. By September, talked about 15.5 per cent.
“Naturally, you will see that investors would want to withdraw from equities markets to fixed income-yielding investments because there is a moderate risk on the fixed income investments. Of course, as much as the MPR keeps going up, then you would expect that investors will move and that accounts for the loss in the equities market, in favor of the fixed income market.”
