Economy
Naira Gains 53 Kobo Against Dollar at Official FX Market
By Adedapo Adesanya
The Naira broke its weakening streak in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, May 20, after it appreciated against the US Dollar by 53 Kobo or 0.04 per cent to trade at N1,373.34/$1, in contrast to Tuesday’s closing rate of N1,373.87/$1.
The domestic currency also improved its value against the Euro in the official FX market during the midweek session by N1.99 to close at N1,592.53/€1 compared with Tuesday’s closing value of N1,594.52/€1, but depreciated against the Pound Sterling at the official FX market during the midweek session by 39 Kobo to trade at N1,840.00/£1 versus the previous day’s value of N1,839.61/£1.
Data from GTBank FX bench showed that the Naira appreciated against the Dollar yesterday by N2 to sell at N1,379/$1 versus N1,381/$1, but closed flat in the parallel market at N1,390/$1.
The performance of the local currency in the different segments of the forex market comes as the Central Bank of Nigeria (CBN) insisted that it is no longer aggressively intervening in the foreign exchange market to defend the Naira, as it held interest rate steady despite happenings in the global economy.
Governor of the apex bank, Mr Yemi Cardoso, disclosed after the Monetary Policy Committee (MPC) meeting in Abuja on Wednesday that the structure of Nigeria’s foreign exchange market has changed significantly under the ongoing reforms, adding that increased market liquidity has reduced the need for heavy intervention by the CBN.
Currency traders and investors are expected to continue monitoring CBN policy direction, foreign portfolio inflows, crude oil earnings, and external reserve performance as key indicators influencing the naira’s trajectory in the coming months.
According to Mr Cardoso, the CBN will continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.
He described exchange rate stability as the centrepiece of the apex bank’s policy toolkit and stressed the need for stronger collaboration between monetary and fiscal authorities to reduce inflationary pressures in the economy.
As for the cryptocurrency market, it was in green on Wednesday as the US Securities and Exchange Commission (SEC) is delaying the launch of a recent wave of “novel ETFs,” including those that offer prediction-market style event contracts, to consider the implications of introducing the new products.
Prediction markets have become one of crypto’s hottest use cases over the past 18 months and now consistently record more than $15 billion in monthly trading volume across markets spanning from sports and elections to financial results and cultural events.
Dogecoin (DOGE) appreciated by 2.2 per cent to $0.1058, Solana (SOL) grew by 1.99 per cent to $86.42, Binance Coin (BNB) jumped 1.6 per cent to $652.01, TRON (TRX) rose by 1.4 per cent to $0.3604, Bitcoin (BTC) improved by 0.8 per cent to $77,769.62, Ethereum (ETH) soared by 0.5 per cent to $2,135.25, and Ripple (XRP) gained 0.5 per cent to quote at $1.37.
However, Cardano (ADA) dropped 0.4 per cent to trade at $0.2490, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further chalked up 0.32 per cent on Wednesday, May 20, spurred by price appreciation in 11 Plc, and Central Securities and Clearing System (CSCS) Plc.
11 Plc, which used to be known as Mobil, added N22.11 to sell at N243.21 per unit compared with the previous day’s N221.10 per unit, and CSCS Plc gained N1.19 to trade at N71.81 per share versus Tuesday’s N70.62 per share.
The growth posted by the duo raised the market capitalisation by N8.04 billion to N2.495 trillion from N2.487 trillion, and lifted the NASD Unlisted Security Index (NSI) by 13.44 points to 4,171.19 points from 4,157.75 points.
Yesterday, there were two price losers, led by Nipco Plc, which shed N22.60 to close at N287.00 per unit compared with the preceding day’s N309.60 per unit, and FrieslandCampina Wamco, which lost 84 Kobo to sell for N150.95 per share, in contrast to the N151.79 per share it was traded a day earlier.
The volume of trades recorded at midweek dipped by 99.9 per cent to 2.3 million units from 1.9 billion units, the value of transactions fell by 93.7 per cent to N334.2 million from the preceding session’s N5.3 billion, and the number of deals went down by 43.3 per cent to 34 deals from 60 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion sold for N6.5 billion, and CSCS Plc with 60.9 million units exchanged for N4.1 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Dipo Olowookere
The bears quickly took control of the Nigerian Exchange (NGX) Limited on Wednesday, plunging the stock trading platform by 1.02 per cent after the Central Bank of Nigeria (CBN) left the benchmark interest rate at 26.50 per cent.
The bourse sank at midweek as BUA Cement led the losers’ chart, after closing lower by 10.00 per cent to N414.00. CAP lost 9.99 per cent to trade at N210.35, eTranzact shrank by 7.03 per cent to N17.20, International Breweries depreciated by 5.38 per cent to N12.30, and Deap Capital crashed by 4.92 per cent to N5.80.
On the flip side, Zichis led the gainers’ chart after it chalked up 9.99 per cent to sell for N32.04, ABC Transport rose by 9.99 per cent to N8.26, Japaul expanded by 9.95 per cent to N4.09, LivingTrust Mortgage Bank grew by 9.92 per cent to N4.21, and FTN Cocoa soared by 9.91 per cent to N10.76.
Business Post observed that despite the loss, investor sentiment remained bullish, as Customs Street finished yesterday with 42 price gainers and 24 price losers, indicating a positive market breadth index.
The insurance counter was the only riser at midweek, closing higher by 0.80 per cent due to bargain-hunting in the space.
However, profit-taking in the other sectors was responsible for the contraction recorded by the stock market on Wednesday.
The industrial goods segment lost 3.84 per cent, the consumer goods sector depreciated by 0.45 per cent, the banking index slumped by 0.31 per cent, and the energy industry dropped 0.10 per cent.
As a result, the All-Share Index (ASI) moderated by 2,573.05 points to 249,062.37 points from 251,635.42 points, and the market capitalisation depleted by N1.619 trillion to N159.661 trillion from N161.280 trillion.
A look at the activity chart showed that 600.2 million shares worth N32.7 billion exchanged hands in 58,958 deals on Wednesday compared with the 704.0 million shares valued at N32.2 billion transacted in 64,539 deals on Tuesday, implying a jump in the trading value by 1.55 per cent, and a shortfall in the trading volume and number of deals by 14.74 per cent, and 8.65 per cent, respectively.
Access Holdings led the activity chart with a turnover of 56.0 million units valued at N1.4 billion, Japaul transacted 49.9 million units worth N202.9 million, Zenith Bank traded 36.7 million units for N4.8 billion, Sterling Holdings sold 25.9 million units valued at N200.8 million, and Fidelity Bank exchanged 21.7 million units worth N499.6 million.
By Adedapo Adesanya
Oil prices fell about 6 per cent on Wednesday after US President Donald Trump said that negotiations with Iran were in the final stages.
Brent crude futures went down by $6.26 or 5.63 per cent to $105.02 a barrel, and the US West Texas Intermediate (WTI) crude futures decreased by $5.89 or 5.66 per cent to $98.26 per barrel.
Despite saying talks with Iran were in the final stages, Mr Trump warned of further attacks unless Iran agreed to a deal, making investors remain wary about the outcome of peace talks as disruption to Middle Eastern supply continued.
Iranian foreign ministry spokesperson, Mr Esmaeil Baghaei, said Iran was ready to develop protocols for safe shipping traffic in cooperation with other coastal states.
Iran and the US have been in a stalemate for weeks now as Tehran blockades the Strait of Hormuz and Washington blockades Iranian ports. Hormuz is one of the world’s most important trade routes for oil and gas supplies.
Three supertankers crossed the Strait of Hormuz on Wednesday, carrying oil bound for Asian markets, after waiting in the Gulf for more than two months with 6 million barrels of Middle East crude on board. The number of vessels crossing the strait remains well below the 130 or so ships that crossed daily before the war.
Analysts at Citi said that they expect Brent crude to rise to $120 a barrel in the near term, stating that oil markets are underpricing the risk of prolonged supply disruption, and Wood Mackenzie estimated that it could approach $200 if the Strait of Hormuz stays largely shut until the end of the year.
The CEO of the state oil company of the United Arab Emirates (UAE), Mr Sultan Al Jaber, said on Wednesday that it will take at least four months to get back to 80 per cent of pre-conflict flows.
Crude oil inventories in the US decreased by 7.9 million barrels during the week ending May 15, according to new data from the US Energy Information Administration (EIA) released yesterday. The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories saw a draw of 9.1 million barrels in the period.
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