21 December 2015, Lagos – There was no respite for investors in the Nigerian equities market last week as the market plunged further on the back of the value of the Naira dropping to a record low and rate hike by the United States Federal Reserves.
The value of the Naira dropped to a new low of $/N281 in the parallel market last Friday due to shortage of the green back. The situation in the market was further worsened by the policy decision of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve System (The Fed).
The Fed had during the week increased interest rates by 0.25 per cent after several years of keeping it near zero, sending shock waves around global markets. . Consequently, major market indices around the world closed higher. The United Kingdom FTSE, German DAX, France CAC and Japan Nikkei went up by 1.8 per cent , 2.6 per cent and 1.8 per cent respectively. Also the United States S&P 500 and NASDAQ ended the week 0.9 per cent and 0.7 per cent higher.
Conversely, the Nigerian Stock Exchange (NSE) All-Share Index and market capitalisation depreciated by 2.69 per cent to close the week at 26,537.36 and N9.124 trillion in that order..
The equities market has been very volatile this year. It shed 8.4 per cent in the first quarter, then increased by 5.4 per cent in Q2 but declined again to 8.6 per cent in Q3.
But the rate hike by the Fed has raised fresh apprehensions among stakeholders that the Nigerian market may suffer further decline.