14 August 2018 : In just a matter of two days the Nigerian Equity sector has lost N 58bn, The market opened the week with the value of listed equities at N 12.94 trillion and after letting Bear govern the sector for two continuous days, the sector closed yesterday at a value of N 12.94 trillion. It takes a lot of courage to bear such an enormous loss. 

The current YTD loss of the Bourse is -7.49% and looks like it is pretty determined to reach the -10% benchmark, which was witnessed in 1998. But, mind you this YTD loss in 1998 was when Nigeria was in the process of moving from military rule to a democratic government.So, does this mean that present political drama in the country is that grave?

According to Bloomberg data, in former pre-election years, wiz: 2002, 2006, 2010 and 2014, the equity market in the same comparable period, rallied by 18%, 34%, 20% and 2% respectively. But this year is very special, the political thespianism has reached to the level where this YTD loss is as bad as it can get in a democratic government. But, with the current trend of heightened instability resulting in skyrocketing market sell -off, looks like we haven't hit rock bottom just yet. 

The raging hot political climate has caused the equity prices to plummet as investors are demanding a higher risk premium to invest in this wobbly political atmosphere. Hence, it looks like this sell-off trend is the new “it” trend and is here to stay till after the February elections.

In a parallel universe with a more normal environment, the market sell-off is usually delayed till the fourth quarter of the pre-election year. But the current political dynamics rippled into the investment market much earlier than expected. 

The sell pressure will continue to threaten the market, even though the Relative strength Index of the the market s at 24.7, which is below the oversold threshold of 30.

One can only hope that we can see some light at the end of this dark tunnel, or someone need to bring in the lightsaber.

Reporting for EasyKobo on Wednesday ,15 August 2018 in Lagos, Nigeria