|
Markets hate uncertainty. You only have to look at the effect the hung parliament in the United Kingdom has had on the FTSE, with the index shedding around 8% over a 5 day period. While a substantial portion of this downwards movement can be attributed to the current crisis in Greece, the uncertainty around who will form the next government has not helped matters.
Put simply, investors are unsure of what policies will be implemented by the new government. While the Conservatives are determined to cut public spending and avoid increases in National Insurance payments in an attempt to tackle the deficit, Labour is very much opposed to any financial polcies which they see as slowing down the push out of recession. As soon as the Liberal Democrats and Conservatives publicly confirmed that they were in talks to form a coalition, the markets responded with a 5% bounce back in a days trading session.
Will we see this type of response in Nigeria? Are our markets that sensitive to political influences? |