Nigeria stocks fall for second straight week, despite slight gain

August 21, 2015 3:26 PM

The continued decline in crude prices is weighing on Nigeria's economic outlook, analysts said, hurting the naira currency and depressing shares as foreign investors exit.

The Nigerian stock exchange.

Nigeria's stock market fell for the second consecutive week despite a slight gain of 0.44 percent on Friday, August 21, as investors worried about the persistent decline in crude prices sold off shares.

Nigeria's stock market index, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, dropped to a 4-1/2 month low on Monday, below a psychological level of 30,000 points.

The naira, officially pegged at 197 to the dollar since February, dropped sharply on the parallel market last month to a record low of 242. It has since recovered and was quoted at 209 to the dollar on Friday up from 211 the previous day as individuals sold more dollars.

Several companies, especially consumer goods firms, have also posted weak half-year results owing to the sharp rise in the cost of inputs as a result of the currency devaluation.

Sub-Saharan Africa's second biggest stock index shed 2.7 percent this week, 16.4 percent lower than its 2015 peak on April 2. The index had jumped 12.2 percent in two sessions after Muhammadu Buhari was announced the winner of a closely-fought presidential election, which saw less violence and upheaval than feared ahead of the vote.

The index of Nigeria's top five oil and consumer goods stocks, which have fallen 13.4 percent and 18.4 percent this year respectively, gained 1.5 percent and 2.1 percent each on Friday.

The top two gainers were Access Bank and Nestle each up more than 9.5 percent.