The Nigerian stock market is in the bear territory having loss about 20% from its last peak as indicated by the All-Share Index. Foreign investors are reacting to political tensions leading to 2019 elections in Nigeria by liquidating their holdings on the Nigerian Stock Exchange. Investors, generally, feel apprehensive about the prospects of companies and a selling spree ensued sending stock prices into a tailspin.
It is time to go contrarian since the fundamentals are strong. Crude oil price is above $70 per barrel in August, inflation rate is down to 11.14%, the official exchange rate is relatively stable against the dollar and external reserves hover near $47 billion. Other macroeconomic variables, of course, have not deteriorated. We advise investors not to embark on panic selling; rather, they should look for buying opportunities in the stock market. There are quality stocks trading below their fair values.
