NIGERIAN stocks yesterday rose to end an eight-day rout on speculation that a decline to the lowest levels in more than 3 1/2 years was overdone.
The Nigerian Stock Exchange All Share Index climbed 3.9 percent, the most since April, to 23,335.01 at the close in the commercial hub, Lagos, as 39 shares gained, 8 fell and 132 were unchanged.
The gauge advanced even as emerging-market securities extend their worst-ever start to a year and oil prices tumble further to 12-year lows.
Nigeria’s benchmark gauge has dropped 19 percent this year to near the lowest levels since July 2012.
That’s the biggest decline among 93 primary indexes tracked by Bloomberg after Saudi Arabia’s Tadawul All Share Index and makes equities in the continent’s largest oil producer the cheapest in sub-Saharan Africa.
The drop in 2016 shows how wary foreign investors have become about putting money into a country they say is on the cusp of devaluing the naira because of lower crude prices, which would immediately wipe out gains converted back into foreign currency.
“This is just some investors taking advantage of these low prices and, based on the significant upside potential, who want to hold them for the long term,” Ayodeji Ebo, head of research at Afrinvest West Africa Ltd., said by phone from Lagos. “This will not last for long. It can’t be sustained because the fundamentals remain weak and policies have not changed. It will be short-lived.”
The gauge’s 14-day relative strength index rose to 28.4 on Wednesday, remaining below the 30 level that some technical analysts consider oversold for the sixth day.
United Bank for Africa Plc, the Nigerian lender operating in 19 countries on the continent, gained 7.8 percent to 2.9 naira, its biggest advance since Sept. 11. Guaranty Trust Bank Plc rose 10 percent to 15.15 naira, the most since April 2, while Access Bank Plc increased by 9.8 percent to 4.13 naira, its biggest advance since Aug. 31. Oando Plc, an energy company, rose by 8 percent to 3.78 naira, the most since Nov. 9.
“There are at the moment depressed valuations across sectors, particularly banking stocks that are trading below book value,’’ Adewale Okunrinboye, an analyst at Lagos-based Asset & Resource Management Co., which oversees about 600 billion naira ($3 billion) of investments, said by phone. “The movement in oil prices will test the appetite of these investors buying to take advantage of an entry opportunity,’’ he said.

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