THE Nigerian Stock Exchange (NSE) has been on a free-fall since last Tuesday, when the management of the exchange removed the circuit breakers introduced to check the speedy slide in the prices of shares.
In the four trading days (Up till Friday) after the breakers were removed, the twin major market indicators shed a total of 12.76 per cent each.
Market capitalisation reduced by N1.166 trillion ($9.9 billion) to close at N7.969 trillion ($68.112 billion), while the All-Share-Index dropped 5314.29 points to close at 36,325.86 points.
The NSE had in August introduced a cap of one per cent in price movement. It had earlier jacked the number of units required for the price of a stock to move from 50,000 units to 100,000 units.
But on Tuesday, the NSE scrapped these circuit breakers reverting to the rules that prevailed before the intervention, which placed the maximum drop in the price of a stock at 5 per cent and stipulated that prices could move if up 50,000 units of a stock were transacted.
The restriction on share price movements was announced on August 27 as part of government efforts to arrest falling share prices.
The year opened with market capitalisation at N13.290 trillion ($113.590 billion) and the All-share Index at 57,990.22 points.
But market capitalisation dropped to N12.503 trillion ($106.863 billion) by end of February before it peaked at N12.640 ($108.034 billion) on March 5 this year.
Since then, capitalisation has dropping consistently.
The index on the other hand peaked at 66,371.20 points before it started dropping.
Between this year’s opening figure of $113.590 billion and the $68.112 billion closing figure on October 31, the market has recorded a drop of $45.478 billion. This represents 40.04 per cent in ten months.
Before the current downturn, the Nigerian capital market had witnessed an unprecedented growth capitalisation appreciating by 880.09 per cent in four years. From an opening figure of N1.356 trillion in 2004, it hit N13.290 trillion in December 2007.
And in just one year (2006 and 2007), the market capitalisation appreciated by 358.28 per cent.
Meanwhile, the NSE on Thursday delisted the African Paints Plc’s N20 million redeemable Debenture stock 1997/2000 from the daily official list on receiving confirmation from the trustee that the debenture had been fully redeemed. This automatically leaves the number of listed corporate bonds and securities at 43 and 302 respectively.