Trading Patterns & the Nigerian Stock Market Ahead of General Elections


Thursday, March 5, 2015 5.08PM / TheAnalyst

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The Nigerian stock market in the course of trading during the current year showed a resilient and fluctuating pattern with the downtrend harnessing more points than the upside, as the market YTD figure currently stands  at -11.70%.

A review of trends in the similar period of 2014 revealed that the market recorded -4.27% YTD loss, a clear indication that the level of uncertainties surrounding the forthcoming general election, among other factors, has contributed to the current trend in the Nigerian capital market.

The losses recorded till date in the year cannot be disconnected from the trend observed towards the end of the year in 2014, which eventually culminated in the loss of -16.14%.

Further analysis of the yearly performance review of the NSE ASI from 2010 till date shows that towards the buildup of the 2011 general elections, the market closed the year 2010 with +18.93% gains while the election year closed negative with -16.31% loss

However, the market recorded strong resilience in 2012 and 2013 with +35.45% and +47.19% gains recorded respectively.

The fall in oil price has also affected market performance and it has also resulted in government revenue reduction and by extension affected overall liquidity in the Nigerian economy.

Analysis of trading patterns in the previous election period before now revealed that the stock market gained +6.88% in January 2011 after a 2010 YTD gains of +18.93.


Afterwards, the market started adjusting in anticipation of the elections in April 2011. The market recorded -4.90% losses in February 2011 and a similar pattern was also witnessed in March with a loss of -5.36% (MoM). In April, the election month, the Nigerian stock market lost another -3.77% in 11 trading days before the presidential election held.

Nonetheless, the stock market presently exhibits an "unpredictable" behaviour in a way that saw the market gain +9.13% in the last 10days in February 2015 to reduce the YTD loss from -17.90% to -13.14%.


Market value also increased by N958.45bn within the same period with various value stocks making impressive gains.

Investors seem to have returned back to the market to take advantage of the low prices of stock in a very cautious manner while mindful of the new election dates and the possible negative fallouts.

In a nutshell, while the market has recorded impressive bargain hunting in recent trading sessions, investors are still cautious of the election seasons and this sentiment might prevent full participation of investors in the market until the elections are over.

Click Here To View Nigerian 2015 Election & Markets Tracker


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