Financial experts have said that trading in the
Nigeria’s stock market this week will experience some level of reluctance.
This is coming after global
bourses plummeted at last week’s close as the United Kingdom voted to leave the
European Union. The move had triggered a negative sentiment among investors.
Notably, the Financial Times
Stock Exchange Index and Shanghai Stock Exchange Composite Index declined 130
basis points and 278 basis points respective at week close.
While trading largely in the
green for most part of the week, the Nigerian Stock Exchange receded into
negative territory at week close.
Notwithstanding, the NSE All-Share Index appreciated by 4.79
per cent for the week, putting year to date return at 7.01 per cent.
“Noting the emergence of
risk-off sentiment across global markets following the Brexit decision, we
expect cautious trading across market as investors seek safe havens,” analysts
at Vetiva Capital Management Limited said in the firm’s weekly report.
On June 23, Britain voted to
leave the EU in a 52 per cent to 48 per cent vote in favour of exit. The exit
is expected to happen over the next two years. The decision has set in motion
an unprecedented and unpredictable process that threatens a period of
uncertainty for Britain, Europe and the global economy.
“Amidst renewed global
uncertainty, we also expect the post-Brexit risk-off sentiment to dampen the
current positive sentiment in the Nigerian market in the coming days as market
participants continue to assess the overall impact of the decision,” the analysts
maintained.
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