• Nigerian stock-exchange performance and USD/NGN remain correlated

    Source: FxWire Pro - Commentary / 08 Dec 2014 01:49:20   Eastern Standard Time

    Quotes from Standard Chartered:

    -A clear correlation between the Nigerian stock market's performance and the exchange rate has re-emerged in Q4, with the Nigerian Stock Exchange (NSE) All-Share Index losing 19.1% since early October (and 22.7% since the 2014 high recorded in mid-July).

    -Equity portfolio outflows intensified as the exchange rate came under pressure, which in turn precipitated the NGN sell-off. We estimated foreign holdings of equities at around USD 10bn in late Q3, although this included the valuation effect given the significant rally in the stock exchange between H2-2012 and H1-2014.

    -We think foreign equity holdings may have been reduced by around USD 2.5bn, although this is difficult to quantify in the absence of official CBN figures.