Nigeria’s stocks sunk on Wednesday after JP Morgan said it would eject Africa’s biggest economy from its influential emerging markets bond index due to tough controls imposed to prevent a currency collapse.

In a move that came earlier in the year than expected, JP Morgan said late on Tuesday it would remove the bond listings belonging to the West African nation by the end of October, forcing fund managers to sell Nigerian bonds, which might raise the country’s borrowing costs.

The decision is a blow to President Muhammadu Buhari, who has promised to diversify an oil-dependent economy hit by a slump in global crude prices but who faces criticism for not having appointed a cabinet since his inauguration on May 29.

With no finance minister in place, foreign investors have been left wondering about government policies and struggling to sell shares or bonds as the central bank adopted tough currency restrictions to halt a slide of the naira.

Anders Faergemann, senior sovereign portfolio manager at PineBridge Investments, said he was surprised that Buhari had not started tackling the country’s economic problems more than three months into his tenure.

“As an investor it is flabbergasting that the Nigerian authorities have allowed themselves to be put in this situation,” he said.

All Nigerian stocks listed in the MSCI frontier market index fell by more than 3 percent, while bond yields spiked across maturities.

While many foreign bonds investors have exited the market since JP Morgan warned Nigeria in January and again in June that it would get kicked out of the index unless conditions improved, stocks investors were now also pondering whether to stay.

The U.S. bank had placed Nigeria on its index watch but a decision had not been expected until later this year.

“You can only imagine the chaos that is unfolding here,” a regional African investment analyst said from Lagos, asking not to be named.

“There are many more investors still in equities who are keenly watching how the central bank manages the exit process because if they even sniff the possibility that they won’t be able to get dollars in the future they are going to run for the door,” he said.

The benchmark 2024 bond yield rose to 17 percent on Wednesday from 16.20 percent previous day. The stock index shed 3.02 percent to fall below a 30,000 point psychological level.

Meanwhile, FBN Holdings was the top decliner on the MSCI frontier market index, down 5.15 percent, followed by Guinness Nigeria, by 5 percent, and Dangote Cement and Guaranty Trust Bank, which were both down by 4.98 percent.

Nigeria’s central bank has adopted several currency restrictions to defend the naira after the use of dollar reserves failed to halt a slide. Traders told Reuters the central bank started rationing dollars to foreign investors last week.

NO CABINET

The naira has lost around 15 percent in the last year, with devaluations in November and February. Some have predicted another may be coming, but central bank governor Godwin Emefiele said in July that the currency was “appropriately priced”.

“The basic story is very clear the currency is too expensive … the question now is does the central bank devalue the currency to respond, or tighten down even more on other capital measures to try and prolong the inevitable,” said Arko Sen, director EMEA strategy at Bank of America Merrill Lynch.

Buhari has said he found the treasury “virtually empty”, forcing him to deal with inherited problems, along with the impact of falling oil prices on Africa’s top crude producer, which relies on sales for 70 percent of government revenues.

But investors and business leaders say the lack of a finance minister, and general uncertainty around the cabinet which Buhari has said will be appointed later this month, has resulted in a lack of clear policies that has hurt the economy.

On Wednesday, Buhari’s spokesman Femi Adesina declined to comment on JP Morgan’s decision beyond a government statement issued late on Tuesday saying liquidity for financial markets was improving.

JP Morgan had warned Nigeria that to stay in the index, it would have to restore liquidity to its currency market in a way that allowed foreign investors tracking the index to conduct transactions with minimal hurdles.

http://businessdayonline.com/2015/09/financial-markets-suffer-after-jp-morgan-index-expulsion/ lalasticlala

God save us. Our economy is seriously backtracking and our Government seems totally confuse about any practical solution. The effect is more felt by the good citizens of this country.

why is the dauradullard's body language not stabilizing it. abi is the body odour overpowering the language?

Illiterate gworo chewing president.

bloody masturbators pls try and blame GEJ for this too

No matter what we may go through today or Tomorrow..

My heart is at Rest knowing Baba is working... High income from Oil and other sources never made Nigeria Rich, just a few...

Baba Ride on with your good work...


Tho I'm not happy with the steady electricity in Benue, Tanimu my Generator Technician can fend for his family again, Tho I've advised him to learn building electrification. #TooBad

baba one chance, when a cattle rearer is is presiding over his kindred and "slaves"in the south, what do you expect?

Nigeria is crumbling. The earlier Nigeria crumbles the better for everybody. We didn't know who hausas or yorubas were before this evil entity was created. Nobody knows the meaning of Nigeria or what it represents. My father is older than Nigeria. How can Nigeria then be my father land. I'm a biafran. THE ZOO MUST FALL

We would get back on our feet.

Fork all them whiteman lists, rules and regulations for financial development.

They are what brought Africa to its knees financially. World Bank and IMF comes to mind here.

We need to block all holes through which those thieves who have been in power or close to those in power keep looting us.

We would develop without JP Morgan listing.

We need to break free of these American and European organisations trying to determine our growth and development.

Africa its time we have our own currency; one currency for the continent as suggested by the late Mummuar Ghadaffi.

An African currency would go higher than the Euro used by member countries of the Euro zone due to the huge amount of resources and the endless investment opportunities on the continent

So they expected us to fold our arms and watch the Naira fall same way the Zimbabwean dollar fell.

CBN please continue protecting our currency.

We may feel it hurts now but on the long run we would see the benefits.

China is a shining example. Today the U.S owes China thousands of dollars.

.

Wetin dey worry this Morgan Freeman guy sef?


Why does he hate Nigeria?

I SHALL BE BACK.

,

no wonder

huh?

God will see us through

Its a minor st back it will bounce back

Make una no worry his body language will sort it out

change is here.

Buhari has nothing to offer..he's an enemy to positive development in Nigeria.

for we Wey go Arabic skul like the president,
wey no understand Weytin JP Morgan talk nkor?
abeg mk una explain m for us!

in another news.. .APC blames PDP for inciting JP Morgan against Nigeria!


I am JAZINOGOLD, and I just want to make common sense!

JP Morgan’s decision to phase Nigeria out of its index which many investors track, marked the conclusion of a process initiated in January, Reuters reported.

The naira has lost around 15 percent in the last year, with devaluations in November and February.

While many foreign bonds investors have exited the market since JP Morgan warned Nigeria in January and again in June that it would get kicked out of the index unless conditions improved, stocks investors were now also pondering whether to stay.

Only fools and brainwashed wailers would blame PMB after reading this thread.

Free money

We should all relax and wait for the Dull.apo that hit the ground running backwards and has passed Libya and moving backwards.let us all pray he start moving forward when he get to the Mediterranean sea this September as he promised even though 8 of every 10 things he says are lies

The wailers are wailing oooo.... even the dullarinhos have joined to wail....
Oya o! Choirmaster come and conduct the wailing choir!
I dunno whn naming ministers became a season movie, suspense packed!


Na God hand we dey! God bless Nigeria still

Before i start wailing, PLEASE can some educate me on what JP Morgan is all about? Or who is he?

"Even if Buhari presents NEPA bill as certificate, I will vote for him"

God forbid we revert to the inglorious days of ESSENCO under the Buhari regime 1983-1985. Next time, when Nigerians see a Presidential candidate with NEPA bill as certificate, they'll have a rethink before voting him.

With no finance minister in place, foreign investors have been left wondering about government policies and struggling to sell shares or bonds as the central bank adopted tough currency restrictions to halt a slide of the naira.

The delay in naming ministers is an obvious suicide for the economy.

No cause for alarm, Buhari's body odor will see us through

Ok Nigerians just need to be pacient and espect the best

Thought his slaves said he has strong body odour, and his body odour can fix Nigeria..........nonsensical rubbish. It's not possible for any ministry to function well without a minister. But their brainless messiah thinks presiding over naija is all about accusing people falsely of corruption.

Mtchewww, Nonsensical rubbish. I say it again, nonsensical rubbish.......

If somebody close to buhari don't give him a dirty slap right now, 5 million Nigerians will march to aso rock to call for his impeachment

kunu sipping

Gworo chewing

Economy falling