Thursday, February 19, 2015/ 7.20am / The Nigerian Investor, email@example.com
Almost ten (10) days after the general elections was postponed, the announcement has continued to generate reactions and comments from both market stakeholders and international observers.
The effect of the postponement on the stock market in the first one week has turned out to be massive as ten (10) blue chips are reported to have accounted for about 82% of the N800.74bn loss recorded.
Based on this fact, we can deduce that sectors like Industrial Goods, Financial Services, Consumer Goods and Oil & Gas were the most affected in the loss, while the NSE All-Share Index recorded -8.00% loss within the period under review.
However, as we started a new week, the equity market has recorded positive outlook as it closed in the green zone with +3.14% gains recorded in two consecutive trading days, while time will surely tell if the current tempo will be sustained.
Also, the foreign exchange market continues to get its own side of the hit as the Naira currently exchange for N214.50 to US$1 about 2.14% up from the N210 to US$1 it was when the postponement was announced.
The CBN announced the closure of the rDAS/wDAS foreign exchange window in order to avert the emergence of a multiple exchange rate regime and preserve the country’s foreign exchange reserves.
This action became necessary due to the sharp decline in global oil prices and the resultant fall in the country’s foreign exchange earnings which has led to a widening margin between the rates in the interbank and the rDAS window
The implication of this action according to FOREX operator/analyst is to crash the upsurge in the demand for the dollar and bring about the availability of more dollars in the market.
The NIBOR Overnight rate which was around 16% on February 6, 2015 has been moved up and it is currently at 93.12%, according to data sourced from FMDQ.
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