Nigerian equities naira to come under renewed pressure as oil sinks to 34

It seems like you're referring to the current market situation in Nigeria. Here's a breakdown of the potential impact of oil prices on the Nigerian equities market and the naira:

Oil Prices: The recent decline in oil prices to around $34 per barrel has significant implications for Nigeria's economy. As the country's main source of revenue, a drop in oil prices can lead to a decline in government revenue, making it challenging to fund its activities.

Nigerian Equities Market: The Nigerian equities market is likely to come under renewed pressure due to the following reasons:

  1. Earnings Downgrade: A decline in oil prices can lead to a downgrade of earnings expectations for companies in the oil and gas sector, which can negatively impact the overall market.
  2. Investor Sentiment: The decline in oil prices can lead to a decrease in investor confidence, causing a sell-off in the market.
  3. Currency Pressure: A decline in oil prices can lead to a depreciation of the naira, making it more challenging for companies to service their foreign-currency denominated debts.

Naira: The naira is likely to come under pressure due to the following reasons:

  1. Oil Revenue Decline: A decline in oil prices can lead to a decline in oil revenue, making it challenging for the government to maintain the value of the naira.
  2. Inflationary Pressures: A decline in oil prices can lead to a decrease in the value of the naira, as the country's import-dependent economy is likely to experience inflationary pressures.
  3. Capital Flight: A decline in oil prices can lead to a decrease in foreign investment, causing a decline in the value of the naira.

Mitigating Factors: While the decline in oil prices presents significant challenges for Nigeria's economy, there are some mitigating factors that could help alleviate the pressure:

  1. Diversification Efforts: The Nigerian government has been making efforts to diversify the economy, which could help reduce its reliance on oil revenue.
  2. Non-Oil Sector Growth: The non-oil sector, such as agriculture and manufacturing, has been growing, which could help offset the decline in oil revenue.
  3. Monetary Policy: The Central Bank of Nigeria (CBN) has been implementing monetary policies to stabilize the economy, which could help mitigate the impact of the decline in oil prices.

In conclusion, the decline in oil prices to around $34 per barrel is likely to put pressure on the Nigerian equities market and the naira. However, the government's efforts to diversify the economy and the growth of the non-oil sector could help alleviate some of the pressure.