Investors fret as N100bn foreign investment withdrawal deadline expires today"

Apprehension heightened in the equities market yesterday as the deadline for withdrawal of Morgan Stanley Capital International, MSCI, foreign investment index from the Nigerian Stock Exchange, NSE, expires today. The US-based provider of equity, fixed income, and hedge fund stock market indexes, announced earlier in the month that it was considering yanking off Nigeria from its MSCI Emerging market index. 

Though a decision is expected to be announced today, April 29, 2016, feelers from the NSE indicated that MSCI authorities may postpone the decision while keeping close watch on the investment climate in Nigeria. Equity investors in the Nigerian bourse had lost over N174 billion in the first trading day after the announcement of the intention to withdraw, precisely on Monday, April 11, 2016 and this was followed by moderated losses on the second and third days that culminated into a week loss of about N206 billion. 

The total volume of investments outstanding as at yesterday was about 177 million shares worth about USD500 million (N100 billion on official exchange rate) in 15 companies. 

A few of the stocks affected had recovered slightly but further declines in the share prices were noticed this week, apparently indicating renewed apprehension as the deadline approached. However, three of the affected stocks had a positive outing in the stock market yesterday closing with gains while the overall market position was also positive in terms of both market capitalization and the All Shares Index. 

Though only 15 stocks were under threat by the MSCI moves, the impact snowballed into several others. 

The top ten blue chip stocks affected by the threat of withdrawal includes United Bank of Africa Plc with the highest MSCI-linked foreign investment volume of 54.1 million shares followed by First Bank of Nigeria Plc with 48.1 million shares and Guaranty Trust Bank Plc with 23.5 million shares. 

Also amongst the top ten equities to be affected by the withdrawal are Zenith Bank Plc with MSCI-linked 23.1 million shares, Ecobank Plc with 12.2 million shares, Nigerian Breweries Plc with 6.9 million shares and Unilever Nigeria Plc with 5.7 million shares valued. 

Others affected in lower magnitude includes Lafarge Cement with 2.2 million shares, Dangote Cement Plc with 1.5 million shares and Nestle Nigeria Plc with 0.5 million shares. MSCI’s threat followed the introduction of restrictions on foreign currency trading in Nigeria.