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Nigeria ETF (NGE) Hits New 52-Week Low

Zacks Equity Research

For investors willing to stay away from potential losses, Global X MSCI Nigeria ETF (NGE) is probably on their radar now. The fund just hit a 52-week low, and shares of NGE are down roughly 36% from their 52-week high of $11.87/share.


Are more pains in store for this ETF? Let’s take a quick look at the fund and its near-term outlook to get a better idea of where it might be headed:


NGE in Focus


NGE tracks the performance of the equity market in Nigeria. The fund has a large-cap focus with key holdings in the financials, consumer staples, materials, energy and industrials sectors. NGE charges investors 68 basis points in fees per year and has top three holdings in Nigerian Breweries Plc, Guaranty Trust Bank and Nestle Nigeria Plc (see all Africa-Middle East Equity ETFs here).


Why the Move?


Nigeria, Africa’s largest economy, has been hit by low crude oil prices as it depends on oil for 70% of its revenues. As a result, Nigeria’s economic growth slowed to 2.8% in the third quarter of the year from 6.2% in the same quarter a year earlier, per data released by the Nigerian Bureau of Statistics on Tuesday. The Nigerian economy has already been plagued by higher unemployment, weak currency and civil unrest.


More Pains Ahead?


Currently, NGE has a Zacks ETF Rank of 4 or Sell rating with a High risk outlook, suggesting continued underperformance in the months ahead. Further, the fund has a negative weighted alpha of 31.92. A negative weighted alpha indicates the fund’s likelihood to generate losses. So, it is better to stay away from this fund until the economy stabilizes.


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GLBL-X MS NIGRA (NGE): ETF Research Reports
 
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