Turbulence In Nigeria’s Financial Markets As Supreme Court Declares Tinubu President

Turbulence In Nigeria’s Financial Markets As Supreme Court Declares Tinubu President

In a surprising turn of events, Nigeria’s financial markets experienced a notable disruption, following the Supreme Court’s ruling on the recently concluded presidential elections. The declaration, which confirmed President Bola Tinubu‘s electoral victory, has elicited a series of mixed reactions that seem to ripple through the country’s equities and foreign exchange markets.

The Climactic Court Judgement: An End to Legal Speculations

Nigeria witnessed a significant political juncture on Thursday, when the apex court’s gavel came down, sealing President Bola Tinubu’s electoral fate, and affirming his February 25 election win. This conclusion laid to rest the persistent legal challenges initiated by his prominent opponents, Atiku Abubakar of the Peoples Democratic Party (PDP) and Peter Obi from the Labour Party.

Unraveling the Equity Market Dynamics: A Dive into the Numbers

Financial analysts and investors were on their toes as they watched the equities market react almost instantaneously to the Supreme Court’s verdict. The fallout was apparent as investors faced a staggering loss of N67 billion in a single trading day. The market capitalisation, which is a prime indicator of the market’s overall health, saw a slump, falling to N36.85 trillion from its robust N36.92 trillion standing just a day earlier.

Tracking the year-to-date (YTD) return, there was a slight dip to 30.89%. Furthermore, the All-Share Index, which provides a snapshot of the market’s performance, registered a marginal decline of 0.18%, settling at 67,084.95 points from its previous day’s score of 67,206.25.

So, what fuelled this bearish trend? A deep dive into individual stock performance sheds light on the factors at play. Major companies like MTN Nigeria, Zenith Bank, and GTCO experienced a sales frenzy which, in turn, dragged the market down. MTN Nigeria saw a dip from its N250 opening, closing the day at N249, marking a loss of N1. Similarly, Zenith Bank’s shares fell by N0.10, closing at N33.25 from its opening value of N33.35. GTCO wasn’t spared either, with its shares dropping by N0.55 to conclude at N30.00, down from N30.55.

However, it wasn’t all gloom and doom. Certain stocks defied the bearish trend, showing positive trajectories. Nestle Nigeria emerged as a beacon of hope, closing at N1,050, up from its opening of N1,020. Meanwhile, UBA and Access Corporation displayed resilience, gaining N0.05 and N0.10 respectively.

In a hopeful note, experts at Coronation Research anticipated that despite the day’s setbacks, the market might still register a net positive performance for the week. Their prognosis was backed by the observed uptick in trade turnover, which surged by 15.88% compared to the previous session. Market statistics revealed that an impressive 267.65 million shares, valued at a whopping ₦5.11 billion, were traded in 5,205 deals.

Foreign Exchange Market: The Naira’s Shaky Ground

The ripples of the Supreme Court’s announcement were felt far beyond the equities market, extending to the foreign exchange realm. The Nigerian Autonomous Foreign Exchange Market (NAFEM), earlier known as the I&E window, observed the naira losing ground against the US dollar. The currency depreciated to N837.49 per dollar, a notable drop from its N801.10 position the day before. This shift marked a depreciation of N36.39 or 4.5%.

Parallel market trends mirrored this depreciation. The naira concluded trading at a rate lowered by N1,300 compared to its previous day’s standing of N1,320. Several Lagos-based currency traders, preferring anonymity, confirmed this trend to our correspondents.

Charting the Way Forward

The events of the past few days have showcased the intricate interplay between politics and financial markets. While the Supreme Court’s decision was primarily of political import, its ramifications echoed through Nigeria’s financial landscape. Investors, brokers, and analysts will now be closely watching subsequent developments, seeking strategies to navigate this fluid situation and ensure economic stability.