19, 2020 / 07:15 AM / by NASD Plc/ Header Image
Credit: NASD Plc
Impact of COVID-19 on the Nigerian Economy
According to The International Monetary Fund (IMF) 2020, the global economy is facing its worst downturn since Great Depression. With reference to the Nigeria, the pandemic has affected the economy in five major ways:
1. Borrowers capacity to service loans: Banks are now more reluctant to lend as borrowers struggle to repay the loans which result in the bank depressed earnings and impaired stability.
2. Decline in oil price: With the heavy dependence on oil in Nigeria, the drop in price of crude oil from US$60 per barrel to US$30 per barrel led to a decline in Nigeria's net oil revenue.
3. Importation: Nigeria depends heavily on importation from particularly China and closed boarders led to the shortage of goods e.g., Pharmaceutical supplies and Finished goods.
4. Stock Market: Market Indices fell which led to investors pulling out of their investments. This led to a US$5.9bn loss, the Market Capitalisation also fell by 20%.
5. Reduction of National Budget: As a result of the fall in oil price, a new budget had to be formatted in line with the price changes.
Other Sectors affected by the pandemic include:
To boost the economy, the Federal government needs to intervene in the area of Small and Medium-Sized Enterprises (SME). These SMEs are significant as they contribute to economic development of the nation through their assets, revenues and employees. With COVID-19 threatening their existence, many who work with them will be going home without salary, may be for the second month. Some are already running serious losses unlike bigger establishments that have reserves to keep them going. For the economy to survive at this time, the government needs to bail out these SMEs.
Despite the effects of the pandemic on the Nigerian economy, NASD remains committed to encouraging capital inflows into firms that are in need of it. Through the NASD Enterprise Portal and Venture Ramp, firms can access the much needed capital required for expansion or the completion of projects. Therefore, this will increase the probability of job creation and retention and hence the growth and development within the creative industry.
NASD OTC Securities Exchange Market closed on a positive note YTD as the market recorded an increase in performance. NASD Security Index Year to date return rose by 3.62%. Total volume traded Year-to-Date stands at 7,926,086,229 units in 1476 deals and total Value traded is N12,649,840,516.08.
Week 51 Overview
NASD OTC Securities Exchange closed the week with a negative return on NSI. The NSI return fell by 1.49% to close the week at 722.82 points against 733.77 points on the preceding Friday, December 11 2020.
In addition, Week 51 saw NASD Investors lose N8.14 Billion in value. NASD OTC Market capitalization closed at N537.27 Billion compared to N545.41 Billion in the preceding Friday, resulting from a negative movement of prices.
There was a -64.56% decrease in the total value traded during the week as week 51 saw NASD Investors trade a total of N94,522,966.80 in value compared to N266,740,229.25 in the previous week. Total trade activity for the year is valued at N12,649,840,516.08.
Total volume traded during the week was 5,370,977.00 units compared to 6,456,444.00 units in the previous week leading to a 16.81% decrease in trade volume compared to week 50. Total volume traded for the year is 7,926,086,229 units.
Top Traded Securities by Volume
The week closed with Central Securities Clearing System Plc ranking top among the four most traded securities by volume and Food Concepts Plc as the fourth most traded stock by volume traded in the week.
Top Traded Securities by Values
The week closed with Central Securities Clearing System Plc ranking top among the four most traded securities by value and Food Concepts Plc stood as the fourth most traded Security by value for the week.
Advancers for the Week
There were no Advancers in the week
Decliners for the Week
Three of NASD OTC Stocks closed the week with a significant drop in value.
FrieslandCampina Wamco Nigeria Plc, which currently holds a Market Capitalization of N126.92 Billion closes the week at N130 representing a 3.70 percent decrease from the previous close of N135.
Central Securities Clearing System Plc, which currently holds a Market Capitalization of N75.00 Billion closes the week at N15.0 representing a 2.60 percent decrease from the previous close of N15.4.
Niger Delta Exploration and Production Plc, which currently holds a Market Capitalization of N55.33 Billion closes the week at N305.00 representing a 2.22 percent decrease from the previous close of N311.94.