Nigeria ETF Continues its Tale of Woe

To this point in Thursday’s session, just one exchange traded fund has touched an all-time low. That dubious honor belongs to the Global X Nigeria Index ETF (NYSEArca: NGE).

Down nearly 2% today, NGE, the lone ETF dedicated to Africa’s largest economy, is now down a staggering 26.4% over the past 90 days, a decline that has exacerbated by tumbling oil prices. NGE has been ina bear market as the slump in the energy market pummeled Africa’s largest oil producer and a depreciating local currency scares away foreign investments. [Oil Drags Nigeria ETF Into Bear Market]

Nigeria, which earlier this year became Africa’s largest economy as measured by GDP, is also home to the continent’s second-largest equity bourse, but oil charts the course for government revenue, Nigerian equities and NGE.

As the 12th-largest oil producer in the world and eighth-largest exporter, Nigeria is home to the world’s 10th-largest proven crude reserves with oil driving 40% of GDP and 80% of government receipts, according to Rareview Macro founder Neil Azous.

NGE allocates 9.5% of its weight to energy stocks, the ETF’s third-largest sector weight behind financial services and consumer staples.

Highlighting the recent (and glum) price action in Nigerian stocks, Azous notes, “The Nigerian Stock Exchange All Share Index (symbol: NGSEINDX) was -3.65% and was the worst market among the 93 primary indexes tracked by Bloomberg. Additionally, on YTD value % change (-20.39%) or YTD value % change adjusted by the currency (-27.25%) Nigeria solidified its ranking as the worst performing market in the Middle East and Africa.”