THE overall market value of stocks traded at the floor of the Nigerian Exchange Limited (NGX) fell by N674.53 billion this week, as concerns over installing an interim government triggered investment sentiments in the capital market.

Market capitalisation, the market’s total market value dropped to N28.87 trillion on Thursday, April 6, from N29.54 trillion that the market opened with on Monday, April 3.

The Department of State Services (DSS) had on Wednesday, March 29, disclosed it had uncovered a plot by some political actors to install an interim government in the country, raising dust in the political and economic space.

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The ICIR had reported that the Nigerian stock market lost N856.97 billion in the month of March.

Sharing his thoughts on what further drove the market to record a four-day straight decline in the first week of the new month, the national chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, told The ICIR that the uncertainty in the political space might be a deciding factor in the capital market.

According to Okezie, the Nigerian economy is still in the woods and election matters are yet to be settled by the court.

He believed that expediting action on the cases would help in bringing relief to investors.

“Let’s know the direction the economy will be moving that will give us the direction the market will head for now. The coast is not clear because the outgoing government is just standing still even when their presence has not even helped the market,” Okezie said.

He also identified insecurity as still prevalent, though it appeared it was dropping before the general elections.

“After the election we have begun to see pockets of killing here and there, and in the north,” Okezie added.

Investors are expected to trade cautiously as insecurity and political activities continue to headline Nigeria’s macro economy, analysts at Cowry Asset Management stated in their weekly market report.

“We continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook,” the analysts said, adding that in the week to come, they expected the “current trend of mixed sentiments to linger as the market seeks for a major catalyst that could trigger positive sentiments.”

The socio-political tension emanating from the recently-held general elections recently held is taking its toll on investors’ confidence, the chief executive officer, Highcap Securities Limited, David Adonri, told The ICIR.

“The cumulative effect of all these is that migration of financial assets from equities to the safety of debt in this quarter may be inevitable,” Adonri posited.

He noted, however, that the stock market might also be reacting to rising inflation, hike in interest rate and low capital inflow.

“Investors are also gearing up for the anticipated negative impact of the currency confiscation exercise on fundamentals of companies when Q1 (first quarter) results start hitting the market this month,” he said.

Abel Ezekiel, an investment and portfolio analyst, reminded that the rumour about an interim government remained a rumour.

Ezekiel said, “Are we now saying that President Muhammadu Buhari will install an interim government when he is to hand over to a president-elect from his party? On what basis?”

Arguing that some analysts were just making a statement outside the reality on ground, he said, “What is happening is far different from what happened in 1993 when Nigeria was forced into an interim government.

“The drop in the market value this week was as a result of the drop in the share price of Airtel Africa.

“What we saw this week is a corrective step, a kind of investors’ strategy to take dividends, and not because of the colour of the rumour of an interim government.”

Meanwhile, the local stock traded for four days as the federal government declared Friday, April 7 and April 10 public holidays to mark the Easter celebration.

Movement of stocks showed that the NGX All-Share Index depreciated by 2.28 per cent to close the week at 52,994.13 basis points (bps), leaving the year-to-date return to decline to 3.40 per cent from 7.04 per cent last week.

This caused the stock market to drop further in value as investors also reacted to the publications of economic data and dividend announcement by companies.

Part of what also played out in the market was that investors have begun to reposition ahead of the first quarter earnings season based on the current price levels that have been perceived to be an attractive point of entry.

However, the stock market trended downward as a result of sell-pressure in some of the mid and large capitalised stocks.

Across the sectors, performance was largely negative, except for the insurance sector which gained 2.19 per cent to close at 181.40bps, while all other sub-sector indices dropped in volume.

The industrial index led the pack, dropping by 3.65 per cent to close at 2,455.43bps; banking index saw a 1.05 per cent loss to 448.23bps; consumer goods index declined by 0.62 per cent to 698.37bps; and oil and gas index fell by 0.11 per cent to 510.25bps.

The share price of Airtel Africa, the most capitalised stock on the Exchange, dropped by 10 per cent to close at N1,331.10 from N1,479.00 it opened on April 3.

In the review week, a total turnover of 1.054 billion shares worth N10.05 billion in 16,155 deals was traded by investors, in contrast to a total of 2.071 billion shares valued at N17.562 billion that exchanged hands last week in 17,917 deals.

While 37 stocks depreciated in price higher than 30 in the previous week, 16 stocks appreciated in price during the week lower than 37 stocks in the previous week.