Nigerian Stock Index Drops to 2-Year Low as Oil Trades Under $60

Nigeria’s benchmark stock index tumbled to an almost two year low as the outlook for Africa’s biggest oil producer worsened with Brent crude trading below $60 a barrel.

The Nigerian Stock Exchange All Share index weakened 2.3 percent to 29,789.59 in Lagos, the commercial capital, its lowest close since Jan. 15, 2013. The gauge has dropped 28 percent this quarter, the worst performance in Africa. The naira depreciated 0.2 percent to 180.65 against the dollar at 3:03 p.m., extending its loss since October to 9.3 percent.

“What we’re seeing in the market is largely reflective of what we’ve seen with oil prices and the naira,” Tajudeen Ibrahim, an analyst at Chapel Hill Denham Securities Ltd., said by phone from Lagos. “Fundamentally, many of the listed companies are still strong. It’s just that investors’ confidence is weak because of the outlook for oil prices and the currency.”

Policy makers in Nigeria, which derives 70 percent of government revenue from oil, have proposed spending cuts and devalued the naira last month amid declining foreign reserves. Fitch Ratings Ltd. today said Africa’s largest economy will suffer from worsening current account and fiscal balances and cut its 2015 growth estimate to 5.2 percent from 6.4 percent.

Dangote Cement Plc, controlled by Africa’s richest man Aliko Dangote and the largest company on the bourse, fell 4 percent to its lowest close since March 2013. Eight stocks rose, 34 dropped and 153 were unchanged.

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