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Investors had a N329.39 billion loss at the close of the market which stock market traders said was majorly caused by the continued scare of the coronavirus and the unexpected 30 per cent oil price drop.
According to a report by SB Morgen, a firm of economic analysts, the banking sector index recorded an 8.95 per cent decline as the slump in oil prices raised concerns of the quality of oil and gas loans.
A portfolio manager with Traders Investment and Portfolios Limited, Tunde Martins, said “investments advice would be shifted away from stocks most especially banking stocks until there is a solution in the oil market.”
He suggested that opportunities in the bonds markets should be looked into.
The global stock decline showed the fears in investors despite public companies declaring dividends this season in Nigeria.
Eighty public quoted companies on the Nigerian Stock Exchange have declared dividends for their investors, which should make investors happy but the persistent oil price drop has been a subject of worry.
The SB Morgen report showed that the NSE, which was the best performing market at some point this year has now lost all those gains and is in the negative year-to-date territory.
“Investors would rather look at the bonds (Federal Government bond) market which is considered the safest and risk-free in all investments in the domestic debt market, the report advised.
The SB Morgen further suggested in its report that the naira should be devalued at a crucial period like this, arguing that devaluing the naira would ease the mounting pressure on the currency and foreign exchange reserves.
The National Assembly approved a $22.7 billion loan last week which the Federal Government said it plans to repay from proceeds from the sale of oil.
The major oil drop came after the trade war between Russia and Saudi Arabia on Friday.
According to CNN, Russia refused to go along with the Organization of the Petroleum Exporting Countries (OPEC) proposal to rescue the coronavirus-battered oil market by further cutting production at a meeting in Vienna on Friday.
Saudi Arabia went further to slash its April official selling prices by $6 to $8, according to analysts, in a bid to retake market share and heap pressure on Russia.