Nigerian Exchange, Emerging Markets Mixed On Trump’s Win

Nigerian equities market fell sharply on Wednesday, with investors losing a whopping N337.13 billion in market capitalisation despite massive broad rally on Wall Street after Donald Trump’s victory in the U.S. presidential election.

Fueled by the news of Trump’s victory, U.S. equity indexes soared, with the benchmark S&P 500 jumping two per cent to a record high and huge gains in areas such as small cap stocks and banks that are poised to benefit from Trump’s expected lighter regulatory touch.

But stocks in Nigerian equities market lost significantly as the benchmark index shed 57 basis points to close at 96,567.24 points driven by selloffs in Tier-1 banking stocks including GTCO (-1.91%), ZENITHBANK (-0.81%), and UBA (-9.99%). Consequently, the yearto-date (YTD) return fell to 29.15 per cent.

In other emerging markets of Africa and Asia, mixed reactions have also greeted Trump’s return to the White House with analysts saying that the markets are yet to pricein the news. “The market is still digesting the news of Donald Trump’s victory; and its expected impact on our market would take a longer-term as more details on Trump policies unfold,” said the Managing Director and Chief Executive Officer, Wyoming Securities and Investments Ltd, Tajudeen Olayinka.

However, the Managing Director and Chief Executive Officer, Arinvest Securities Ltd, Mr. Ayodeji Ebo, expressed hope that Trump’s economic policies might trigger rekindled interest by foreign investors in Nigerian equity market.

“Trump promises interest rates cut, and if that happens, foreign investors might look towards Nigeria and other emerging markets for higher yield and returns on investments,” Mr. Ebo told New Telegraph.

In the U.S, Trump’s pledges to raise tariffs, cut taxes and slash regulations encouraged investors to dive into a range of assets that looked likely to benefit from such policies. Markets that could suffer under tougher tariffs, including those in some of major U.S. trading partners, bore the brunt of the sell-off.

An analysis of activities at the Nigerian Exchange (NGX) on Wednesday showed trade turnover settled lower relative to the previous session, with the value of transactions down by 60.73 per cent. A total of 418.39million shares valued at N10.04billion were exchanged in 9,021 deals.

STERLI N G N G (+2.63%) led the volume chart with 79.65million units traded, while UBA (-9.99%) led the value chart in deals worth N2.57 billion. UBA (-9.99%) topped 20 others on the loser’s table while EUNISELL (+9.87%) led 19 others on the gainer’s table.