Foreign Investors On Edge After Naira Devaluation

By Emmanuel Aziken

Last weekend’s quiet 5% devaluation of the naira against the dollar was on Monday morning setting the background for market watchers on the flow of the Nigerian equity market in the new week.

The Central Bank of Nigeria had made an official devaluation of the naira to N379 to the dollar putting different permutations for market operators as trading commenced.

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The devaluation came against the bounce in the market on the last trading day on Friday when Nigerian equity market closed on a positive note as the All Share Index increased by 0.45 percent to close at 25,041.89 points.

The market capitalisation of equities listed on the NSE also increased to ₦13.063 trillion from ₦13.005 trillion following gains by 23 stocks.

However, the permutation for sustained growth in the new week was given a fillip by the CBN devaluation of the naira which puts mainly foreign portfolio investors in jeopardy as it easily erodes their gains in the market.

Given the fact that the foreign portfolio investors had helped to sustain the market their reaction to the development will be seen at the end of trading on Monday and in the week ahead as they assess the impact of the devaluation on their investments.

The governor of the Central Bank of Nigeria, Mr. Godwin Emefiele had consistently assured the foreign investors of the security of their investments in the country and his readiness to assure them of quick exit whenever they so desired.

However, they may not have gotten the assurance of Governor Emefiele on the impact of the devaluation on their investments.

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