Economy
Naira Appreciates After CBN Rules Out Devaluation
By Adedapo Adesanya
Calm return to the foreign exchange market in Nigeria on Friday after the Central Bank of Nigeria (CBN) on Thursday said it was not going to devalue the Naira as earlier being feared in some quarters.
This made the local currency to retreat to N380/$1 at the parallel market yesterday, after the value depreciated to N400/$1 at the black market due to panic demand for forex. This consequently made dealers to hoard the ones with them.
However, the local currency depreciated by N2 against the Euro at the same market segment, selling on Friday at N416/€1 instead of the N414/€1 it was traded on Thursday. But the domestic currency maintained stability against the Pound Sterling at N490/£1.
Business Post observed that the assurance from the CBN about the devaluation rumour boosted the confidence of investors at the Investors and Exporters (I&E) segment of the market yesterday.
Data from FMDQ showed that the Nigerian currency appreciated by N5.53k or 1.48 percent against the US Dollar to close at N368.47/$1 compared with N374/$1 it traded at the previous session.
The value of transactions at the I&E window significantly increased during the session as transactions worth $1.03 billion were carried out in contrast to $156.42 billion achieved on Thursday, representing an increasse by 5, 578 percent or $872.58 million.
In the statement issued by spokesman of the banking industry regulator in Nigeria, Mr Isaac Okorafor, it was stressed that, “The Central Bank of Nigeria wishes to note with displeasure, the rumours and speculative activities of unscrupulous players in the foreign exchange market, borne out of the impression that the CBN is on the verge of devaluing the Naira, and triggering panic in the FX Market.”
At the interbank segment of the market, which is the government’s exchange rate, the Naira remained flat at N306.95/$1.
At the Bureaux De Change (BDCs) segment in Lagos, the Naira gained N12 to close at N370/$1 in contrast to N382/$1 it quoted the previous session. Against the Pound, the domestic currency remained unchanged at N490/£1, while it declined by N8 on the Euro to close at N416/€1 compared with N408/€1 it was sold on Thursday.
In Abuja, the local currency appreciated by N2 against the greenback to N366/$1 from N368/$1. However, it depreciated against both the Euro by N6 to N424/€1 from N418/€1 and lost N1 on the Pound to close at N488/£1 in contrast to the previous rate of N487/£1.
In Port Harcourt, the local currency appreciated by N11 against the American currency to N370/$1 from N381/$1, and gained N13 against the British Pound to N476/£1 from N489/£1, while it appreciated by N63 on the Euro to N417/£1 from N480/€1.
In the city of Kano, the value of the Naira was strengthened against the Dollar by N13 to close at N367/$1 compared with N380/$1 it was traded the previous day. However, it closed flat against the Pound Sterling and the Euro at N475/£1 and N417/€1 respectively.
In its statement on Thursday, the CBN warned against panic buying, noting that it has commenced investigations in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the persons and FX dealers behind the panic calls.
“The CBN will invoke the full weight of applicable sanctions on any persons and authorised dealers found to be involved in such disruptive and speculative market behavior,” the CBN warned, maintaining the country has what it takes to defend the Naira.
By Adedapo Adesanya
Okitipupa Plc was the sole price gainer at the NASD Over-the-Counter (OTC) Securities Exchange on Friday, August 7, lifting the trading platform by 0.44 per cent at the close of transactions.
The share price of the palm oil producer appreciated during the trading session by N25.00 or 9.0 per cent to N277.00 per unit compared with the previous day’s N252.00 per unit.
As a result, the market capitalisation gained N12.29 billion to close at N2,807 trillion, in contrast to the previous session’s N2.795 trillion, while the NASD Security Index (NSI) added 93.63 points to finish at 4,678.08 points compared with Thursday’s 4,657.59 points.
The bourse recorded a price loser yesterday, and this was Mass Telecoms Innovation Plc, which crashed by 3 Kobo or 9.4 per cent to settle at 32 Kobo per share versus the previous day’s 35 Kobo per share.
The volume of securities traded by investors plunged by 81.5 per cent to 535,7560 units from 2.9 million units, the value of securities slumped by 93.9 per cent to N6.0 million from N99.2 million, and the number of deals decreased by 41.9 per cent to 36 deals from 62 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 77.0 million units exchanged for N5.5 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
A 0.15 per cent growth was achieved by the Nigerian Exchange (NGX) Limited, driven by continued buying interest in banking stocks such as First Holdco and others.
The banking index was up by 1.53 per cent during the session, offsetting the losses recorded by the others. The industrial goods segment fell by 0.37 per cent, the insurance counter shrank by 0.21 per cent, and the energy sector contracted by 0.04 per cent, while the consumer goods space closed flat.
At the close of business, the All-Share Index (ASI) moved up by 364.26 points to 245,573.60 points from 245,209.34 points, and the market capitalisation increased by N235 billion to N158.513 trillion from N158.278 trillion.
Despite the gains printed by Customs Street during the trading day, investor sentiment was weak, as there were 22 price gainers and 24 price losers, indicating a negative market breadth index.
UPDC surged by 9.23 per cent to N3.55, CWG soared by 6.56 per cent to N19.50, AXA Mansard appreciated by 4.80 per cent to N13.10, Neimeth advanced by 4.24 per cent to N8.60, and Cutix improved by 4.00 per cent to N2.60.
Conversely, Red Star Express lost 10.00 per cent to trade at N18.00, CAP declined by 9.98 per cent to N115.45, John Holt shrank by 9.82 per cent to N10.10, ABC Transport depreciated by 9.57 per cent to N5.20, and Legend Internet crashed by 8.70 per cent to N4.20.
A total of 1.5 billion equities worth N26.7 billion exchanged hands in 42,580 deals on Friday versus the 531.8 million equities valued at N20.5 billion traded in 44,826 deals on Thursday, representing a spike in the trading volume, value, and number of deals by 182.06 per cent, 30.24 per cent, and 5.01 per cent, respectively.
The busiest stock during the session was Fortis Global Insurance, with a turnover of 824.5 million units valued at N2.1 billion, FCMB traded 217.9 million units worth N2.8 billion, Access Holdings exchanged 176.2 million units for N4.7 billion, Chams sold 32.5 million units worth N132.1 million, and First Holdco transacted 25.0 million units valued at N3.7 billion.
By Adedapo Adesanya
The Naira further closed south against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 7, by 81 Kobo or 0.06 per cent to N1,365.69/$1 from N1,364.88/$1.
It was a similar situation for the Nigerian Naira in the official market during the session as against the Pound Sterling; it lost N1.08 to quote at N1,839.17 versus the previous day’s N1,838.09/£1, and against the Euro, it slipped by N1.23 to close at N1,575.73/€1, in contrast to the preceding session’s N1,574.80/€1.
Further, at the GTBank forex counter, the Nigerian currency weakened against the Dollar yesterday by N2 to settle at N1,371/$1 compared with Thursday’s N1,369/$1, and at the black market, it traded flat at N1,400/$1.
The country’s legal tender came under FX demand pressure on Friday, with turnover rising by 304.3 per cent to $399.5 million from $98.8 million the previous day, with the number of deals slightly up to 107 from 106.
Next week, traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market could help ease demand pressure.
As for the cryptocurrency market, Bitcoin (BTC) neared the $65,000-mark after it gained 0.8 per cent to trade at $64,968.05, as investors took advantage of recent drops to shore up their holdings.
Previously, the decision by the US Senate to delay a vote on the Crypto Clarity Act until at least September weakened the outlook. The bill, which would set out which US regulator oversees which digital assets, needs 60 votes to pass and it is unclear whether it currently has 50.
Solana (SOL) grew by 2.5 per cent to $74.81, Dogecoin (DOGE) rose by 1.3 per cent to $0.0702, Binance Coin (BNB) jumped by 1.1 per cent to $593.80, Ethereum (ETH) expanded by 0.5 per cent to $1,916.08, Ripple (XRP) also soared by 0.5 per cent to $1.03, and TRON (TRX) appreciated by 0.2 per cent to $0.3275.
However, Cardano (ADA) depreciated by 1.0 per cent to $0.1997, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
