State of the Market – Meristem issues urgent call to clients

Proshare

Friday, January 15, 2015 12.28PM / Meristem

The Nigerian Stock Exchange All-Share Index (NSEASI), after shedding 3.41% today to bring the 2016 loss level to 15.37%, closed below its 52-week low of 24,239.98pts. By implication, in less than 10 trading days the market is 1,639.8pts away from replicating the total points lost in 2015.

The current sell-off especially by foreign investors is a reaction of global portfolio managers to perceived emerging market vulnerabilities given the developments in the Chinese economy, which is the benchmark for Emerging Market Economies (EMEs). However, when this accelerated drop in the market is put in recent historical perspective, it adds another variable to the equation as it begs a question – Is another tacit devaluation in the offing?

 

NB: 'Circuit Breaker'

 

Refers to any of the measures used by stock exchanges during large sell-offs to avert panic selling. Sometimes called a "collar."

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