Nigeria stocks record mid-day gain of N150bn despite Coronavirus fears

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Equity investors at the Nigerian Bourse are buying value stocks despite renewed fear of Coronavirus (COVID19) following its third case in Lagos, the country’s business capital.

The Nigerian citizen returned into the country on March 13 from United Kingdom, one of the COVID19 high risk countries like Italy and the United States.

Besides the aviation and tourism sectors, coronavirus has also crippled international trade and rocked the capital market, with stock prices and bond plunging. Oil price per barrel stood at $30.31 as at 12.26pm Nigerian time.

As investors rushed to position in stocks with attractive valuations, the value of stocks listed on the Nigerian Stock Exchange (NSE) increased by N150billion to N11.986billion in mid-day trading session.

For instance, Nigerian Breweries share price was up by 7.33percent as at 12.33pm on Tuesday March 17, Stanbic IBTC (+4.10percent), MTNN (+0.97percent), GTBank (+3.95percent), and Union Bank (+9.85percent).

The Nigeria stock market had joined the global rout with year-to-date (ytd) return printing at a record negative of -15.30percent lately. It lost about N1.8trillion last week.

“Given that there is no improvement in global outlook –depressed oil prices and the coronavirus pandemic –we think there is still a possibility of further declines,” said analysts at Coronation Research.

All over the world, the outbreak of Coronavirus (COVID-19) has drawn the attention of monetary authorities.

Notably, the US Fed tweaked its policy rate lower to zero, while launching a $700billion asset purchase programme. Also, the Bank of England trimmed its policy rate by 50basis points (bps) – its first rate cut since July 2016.

Also, the Central Bank of Nigeria (CBN) at an emergency meeting recently, joined the easing bandwagon as it released six initial policy measures, aimed at reducing the impact of the global pandemic on Nigeria’s economy.

Nigeria on Tuesday March 17, 2020 confirmed the third case of Coronavirus in Lagos.

A Nigerian citizen, who is the newest case of coronavirus reported in Lagos returned into the country on March 13 questions the decision of the Nigerian government to allow people from high-risk nations into the country.

“With international communities locked down, factories closed, trade slowing, and investor confidence plummeted during the prolonged fight against COVID19, there is no saving the Nigerian economy from the butterfly effect of the pandemic.

“The impact of the coronavirus outbreak on Nigeria’s economy is likely to be significant, as it is poised to take a toll on critical economic sectors.

“The situation is being made worse by the slide in crude oil prices as a result of a crude price war between Saudi Arabia and Russia”, said Mosope Arubayi’s team of analysts at Lagos-based Vetiva.

— Business Day

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