Nigeria stock market remains under pressure

The Nigeria Stock Exchange has been facing pressure with recent declines in the market, as profit-taking activities continue to impact the NSCO share index. Babajide Solanke, Research and Strategy Analyst at FSDH Merchant Bank, expressed concerns about the sustainability of the bearish trend and the broader economic outlook. The market closed down by about 2.45%, with the NSCO share index at 32,122. In the currency markets, stability was observed in both the parallel and interbank markets. The special window for exporters saw the Naira trading at 363 to the dollar, showing strength in that segment of the market. Solanke highlighted several key factors influencing the market, including oil prices, foreign portfolio investors' sentiment, and the suspension of the implementation of the MSCI frontier market index review. These elements have contributed to a cautious approach among investors, leading to profit-taking activities and a wait-and-see approach. Despite the market challenges, Solanke advised investors to consider the long-term value of stocks and emphasized the importance of maintaining a diverse portfolio. He suggested that the economy's recovery path is still intact, despite the current market conditions. The analyst also discussed the trends in the fixed income market, noting the competition for funds between the equity and fixed income markets. With expectations of inflation moderation and economic stability, there may be a shift of capital towards the fixed income market in the coming weeks. Overall, the outlook for the Nigerian stock market remains uncertain, with investors urged to exercise caution and focus on long-term growth opportunities.