Stock market investors at the weekend urged the ruling All Progressive Congress (APC) to adopt a conciliatory approach and avoid comments that could inflame the situation and have disastrous ramifications for the stock market as redress is sought by parties who felt wronged in the recently concluded presidential election.
In order to inspire investors’ confidence and maintain the current optimistic in the stock market, they also emphasized the necessity for groups seeking redress to maintain their integrity and adhere to due process of law in their pursuit of justice.
According to the stakeholders, theories on how investors behave have shown that unfavorable news might cause a market panic and cause investors to overreact.
They cautioned that historical political unpredictability and unrest had a negative impact on investors’ moods, asset prices, nation risk profiles, and portfolio allocation choices.
Recall how the stock market in the country suffered greatly as a result of suspected political intrigues leading up to the 2019 elections, costing investors about N3.43 trillion over the course of nine months of steady fall.
Contrary to the popular assumption of strong earnings in 2018, numerous blue-chip companies listed on the Nigerian Exchange Limited (NGX) throughout the period incurred enormous losses.
Moreover, investors’ repositioning in anticipation of the 2022 full-year earnings and dividend announcement helped the country’s stock market overcome election-related jitters to post exceptional gains in the recent months.
For instance, on the first trading day of 2023, the market reopened on a more positive note as investors earned N188 billion in value, and the market capitalization increased to N28.103 trillion from N27.915 trillion, where it ended 2022.
Additionally, February was a bullish month for the Nigerian Exchange Limited (NGX), as increasing bargain hunting persisted in nearly all blue-chip equities. As a result, market capitalization increased by N1.4 trillion, and the All-Share index posted a year-to-date gain of 8.89%. (YTD).
Eric Akinduro, president of the Ibadan Zone Shareholders Association, said in particular that there has recently been a lot of tension in the political environment and warned that the market is overly sensitive to problems in the political sphere.
“I think the economy and the polity have witnessed a lot of tension recently and one thing about the stock market is, it is too sensitive to issues around the political space.”
“The best advice is that any aggrieved candidate should seek legal redress and that has been done. The outcome will give us direction. The current tempo is not too high so we should be careful of our utterances.”
Patrick Ajudua, the president of the New Dimension Shareholders Association, said: “Aggrieved parties should allow the court process to flow without any negative utterances, as it will affect the positive trend we are enjoying currently in the market.
“The peaceful atmosphere we are experiencing in the aftermath of the election is very important, it has led to a stable investment climate, especially in the equities market. Indeed, this is a demonstration of political maturity.”
“So let the aggrieved parties continue their legal process to seek redress without resorting to violence in the interest of the market and entire economy,” he said.
Moses Igbrude, the national coordinator of the Independent Shareholders Association of Nigeria (ISAN), claimed that because the capital market is so delicate, even the tiniest amount of unrest or unrest can have a negative impact.
He said: “I agree that if the situation is not well managed, it will affect the capital market negatively. The winner should manage his supporters well. Even if the aggrieved faction attacks them, they should adopt a reconciliation approach to maintain peace, after all their principal needs a conducive environment to operate.”
