Nigerian Capital Market 1st Quarter Review Amidst COVID-19

Posted on April 4, 2020


The quarter ended 31st March 2020 saw the stock market indicator which is the NSE All Share Index losing in the red with-20.65%, as against -1.24% loss in Q1 2019.

It is pertinent to note that companies turned out good end-of-the-year financial results along with improved dividend declarations during this period but this has no significant impact on the market performance. Overall, the quarter underperformed grossly with respect to the indicator mentioned. This weak performance might be largely due to the global impact of the coronavirus (COVID-19) pandemic on the economy, weak foreign portfolio investments, high uncertainty in the economy and owing to intense sell pressure occasioned by investors’ apathy.

Now that lockdown and restrictions are on movements and businesses, economic uncertainty has been heightened. Additionally, with the crude oil trading around $22 per barrel which can be attributed to the significant drop in global demand, the fallout from the Coronavirus pandemic and the oil war between Saudi Arabia and Russia our economy is likely to experience severe pressure in the 2nd quarter.

The crash in crude oil price is also likely to bring about insufficient government foreign exchange earnings in the short to medium terms. Therefore, it is clear that diversification is inevitable now, due to our over-reliance on revenue from crude oil. From the records, the oil price has been on a sharp decline since the beginning of the year.

Consequently, meeting import funding and government expenditure is now a cause for concern going forward. The government needs to revise the budget downward and cut down on non-essential expenditures to achieve some level of stabilities. If this is not considered forthwith it is likely to impact negatively on federal government spending, Federation Accounts Allocation Committee (FAAC) disbursements to the States and also salary obligations.

In conclusion, during this period under review, the Nigerian Stock Exchange in a way to cushion the impact of COVID-19 outbreak, has granted listed companies a sixty (60) day grace period for the submission of their Audited Financial Statements for the year ended 31 December 2019 (AFS), which are due to The Exchange on Monday, 30 March 2020. This become necessary due to the disruption by COVID-19.

Dr Timi Olubiyi holds a PhD in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached via email and twitter handle @drtimiolubiyi 

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Ex-Militant leaders from the nine states of the Niger Delta region have cried out... Continue
This is an amazing time in the career of Nigeria’s fast rising Afropop act,... Continue
OLUWATOBI EMMANUE Captain of Nigeria’s Super Eagles, Ahmed Musa has stated that players are... Continue
One of the youngest, popular and flamboyant monarchs in Lagos and Nigeria, Oba Saheed... Continue
OLUWATOBI EMMANUEL Comrade Yahaya Majeed, a chieftain of All Progressive Congress (APC)  in Osun... Continue
The Arole Oduduwa and Ooni of Ife, Oba Adeyeye Enitan Ogunwusi Ojaja II has... Continue
CYRIACUS IZUEKWE The Assistant Inspector General of Police Zone 2 Command, AIG Ahmed Iliyasu,... Continue
The United Kingdom government has announced three more charter flights to fly back Britons... Continue
In commemoration of this year’s Africa Day, the Africa Union Commission, (AUC) and the... Continue
MIKE AWOYINFA Like the Beatles, we were young, gifted and out to change the... Continue