A 60 percent chance of a potential uptrend in Nigeria’s local bourse has been predicted by researchers at United Capital.
The researchers based their report released Wednesday on a study of 15 bourses, conducted by the European Central Bank (ECB), who found that during the 2010 World Cup trading volumes plunged four percent when a national team was playing, with an additional five percent decrease when goals are scored.
According to the home-based researchers, Nigerian historical data tilt in favour of a potential uptrend for the local bourse during the on-going World Cup in Russia (60% chance). “We note that market return has been bearish in the last two trading days since the tournament began. However, a turnaround before the end of the week is likely as investors hunt for a bargain,” they said.
A look at the Nigerian market interestingly showed that, average volume traded fell 34.5 percent compared to the corresponding period during the 2014 World cup and 25.1 percent during the 2010 World cup.
The local bourse recorded a positive return in three of the last five world cup tournaments since 1998, up 7.9 percent, 7.2 percent and 4.1 percent during 2002, 2006 and 2014 respectively though Nigeria was absent in the 2006 tournament.
On the other hand, the local benchmark index dipped 2.2 percent and 3.1 percent during the 1998 and 2010 tournaments respectively.
This is in contrast to 38 percent and 43 percent declines in European countries and the US respectively, as well as trading volumes in ‘football-crazy’ South American countries, especially in Brazil, Argentina, and Chile, where over 75 percent, plunged the most.
