Lagos - Nigerian stocks fell for an 11th day in the longest run of losses since January 2009 on speculation the currency of Africa’s biggest economy will be devalued because of lower oil prices.
“Foreign investors are exiting the market,” Pabina Yinkere, head of research at Lagos-based Vetiva Capital Management, said by phone.
“They don’t want to be stuck in Nigeria when the naira will be devalued. The fall in the oil price has given a challenging outlook to the economy.”
The Nigerian Stock Exchange All Share Index declined 2.4 percent to 35 081.37 as of 11:46 am in Lagos, heading for the the lowest closing level since May 2013.
That’s the biggest decrease among 93 global indexes monitored by Bloomberg and extends losses this quarter to 15 percent.
The naira weakened 0.8 percent to 168.57 per dollar after closing at a record low yesterday.
Nigeria, which relies on oil for 80 percent of government revenue, has run foreign-exchange reserves to a three-month low as the continent’s largest producer of the commodity bids to defend the naira and avoid raising interest rates or devaluing the currency before elections in February.
Oil has slumped into a bear market as the largest producers in the Organization of Petroleum Exporting Countries resisted calls to cut output.
Since mid-September, the central bank has used reserves to sell dollars outside of regular auctions held Mondays and Wednesdays, according to Standard Chartered.
At auctions, the central bank offers the currency at 155 per dollar, plus or minus 3 percent.
The bank will continue to defend the naira, Kingsley Moghalu, who stepped down as a deputy governor yesterday, said by phone from Abuja.
“They seem to be trying to tiptoe through this period,” Gareth Brickman, an analyst at Johannesburg-based ETM Analytics, said by phone.
“I expect they will be back in the market when conditions are more favourable for them and it looks less like they’re panic selling. The market would soak up every last dollar if they did that.” - Bloomberg News