As lunchtime trade data indicates a fall in the market, the worldwide stock market crisis that began on Friday is gradually making its way to the NGX, with MTN Nigeria being the main sufferer.
According to NGX statistics, the worldwide sell-off is also having an impact on the NGX. As of August 5, midday trade data showed that the NGX All-Share Index had down by 0.27%, with MTN Nigeria leading the loss.
Put pressure on MTN to sell Nigeria has caused the stock to drop to its lowest point since October 2021; as of 12.30 pm, the share price was N179. At the time this article was published, its share price had decreased by 5.79%..
Banking stocks have also suffered declines, as Wema Bank declined by 4.76%, while GTCO has lost 1% of its market capitalization.
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The crash in MTN Nigeria’s stock was also exacerbated by challenges with service delivery over the past week, as the company’s dropped calls increased drastically since August 1.
Since Friday, August 2, there has been a global stock market sell-off which led to a crash in the European and Asian markets based on trading data from Monday morning.
Trading data from Asian markets show Japanese stocks crashed, with the Nikkei 225 Index down by 12.40%, hitting its lowest point in 2024. The Hang Seng Index was down by 1.60%, with the Shanghai Stock Exchange Composite Index falling by 1.54% to hit its lowest since February 2024.
According to reports, Monday, August 5, has seen Japanese stock markets record their worst trading day since the “Black Monday” of 1987. Some of the heavyweight stocks in the markets have recorded huge losses. Mitsubishi crashed by over 14%, Mitsui and Co. crashed by about 20%, and Sumitomo crashed by about 18%.
The Asian market selloffs were extended to European markets, with the CAC 40 (Euronext Paris), down by 2.26% on market opening, with the FTSE 100 also down by 2.08% upon market opening.
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Big tech stocks have been the major casualty in this global sell-off, with pre-market data showing Microsoft down by 4.53%, Meta down by 4.92%, and Tesla down by 5.44%. Nvidia has also fallen by 20% from its all-time high price.
The sell-off was triggered on Friday, August 2, when the US Labor Department released job data figures for July showing a rise in unemployment to 4.3%, the worst since September 2021.
It is noted that the rise in unemployment was triggered by the US Federal Reserve’s decision to keep the benchmark rates, despite progressive declines in US inflation data. With rate hikes from 2022 into 2023, benchmark rates in the US have reportedly strained economic activities, thus leading to a constraint in the ability of employers to hire more labour.
A rise in unemployment as well as unemployment benefits in the US is a signification of declining economic activities, thus the July unemployment data led to panic about a recession. On Friday, NASDAQ closed with a 2.43% decline, while the NYSE crashed with the NYSE Composite Index falling by 1.79%.
The US Federal Reserve is set to meet again in September, with analysts projecting a rate cut for the first time in two years. However, there are fears that a rate cut in September would further feed into the sentiment that the US economy is on the edge of a recession.
