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Between May 29, when the President Muhammadu Buhari administration was inaugurated, and yesterday, investors in the equities segment of the Nigerian Stock Exchange lost N1.306tn, a review of the performance of the stock market has shown. According to market operators and analysts, the huge loss suffered by the investors is largely due to the lack of clear policy direction by the current government, the protracted delay in appointing ministers and other negative developments in the economy.

These, they said, included the foreign exchange controls put in place by the Central Bank of Nigeria, the decision of JPMorgan to remove Nigeria from its government bond index, and the declining Gross Domestic Product growth.

Meanwhile, hopes that the appointment of ministers by the President will help halt the losses and spur the recovery of the stock market have started to fade, with investors unimpressed by the list of ministerial nominees. Rather than the positive reaction that greeted the declaration of Buhari as winner of the presidential election and the appointment of Mr. Ibe Kachukwu as group managing director of the Nigerian National Petroleum Corporation, the market has reacted negatively to the ministerial list.

The stock market had risen by N904bn or 8.4 per cent, its biggest rise in a day, on April 1, the day after Buhari was returned as winner of the election, and it rose for four straight days after Kachukwu’s appointment. Capital market operators and analysts had hoped for a similar reaction with the release of the first batch of nominees for ministerial appointments after a four-month wait during which foreign and some Nigerian investors, who had exited the market due to the uncertainties surrounding the elections and subsequently the economic policy direction of the new government, stayed away.

However, since Wednesday last week, when the ministerial list was sent to the Senate, the stock market had closed on a negative note, with the market capitalisation declining by N377bn or 3.51 per cent in five trading days. “So far, based on what has been released, the market is not impressed,” the Chief Executive Officer, High Cap Securities Limited, Mr. David Adonri, told newsmen in a telephone interview. Explaining further, he said, “We are seriously worried in the market that the bear run has not been reversed so far.”

He however said the market had interpreted the list to be unhelpful because it did not contain technocrats who the market had confidence in to make a positive difference in the economy. “That is because most of the names on the list are politicians who have been recycled, whereas the market was looking forward to having well-tested and experienced technocrats to properly influence fiscal policies,” Adonri said.

The managing director of one of the top capital market operators said rather than boost investor confidence, the list had increased uncertainty in the future of the market and led to doubts about the ability of the Buhari administration to meet expectations. The MD, who spoke on condition of anonymity, said, “The key thing is that the list so far sent does not inspire confidence in investors and the reason is very simple. Who from the list should head the Ministry of Finance? Who should head the Ministry of National Planning? Who should head the Ministry of Industry, Trade and Investment on that list?” He explained that because those questions were difficult to answer, investors were being cautious.