Economy
Nigerian Bourse Shrinks 6.67% as Investors Panic Over Scary Economic Forecast
By Dipo Olowookere
The Nigerian bourse fell by 6.67 per cent week-on-week last week after 29 equities came under heavy selling pressure caused by macroeconomic uncertainty.
Last week, investors were faced with a scary economic forecast from Moody’s, which raised doubts over the ability of Nigerian banks to meet their obligations due to the foreign exchange (forex) crisis in the country.
The global rating agency later downgraded the rating of Nigeria over concerns that the government would find it difficult to boost its earnings despite the price of crude oil rising in the global market.
Traders of stocks at the Nigerian Exchange (NGX) Limited reacted to these fears last week, as they quickly trimmed their exposure in the asset class so as not to get their fingers burnt.
Data showed that the All-Share Index (ASI) and the market capitalisation depreciated by 6.67 per cent to 44,396.73 points and N24.182 trillion, respectively.
Similarly, all other indices finished lower except NGX CG, banking, pension, NGX AFR bank, NGX AFR Div Yield, NGX MERI growth, NGX MERI Value, and industrial indices, which appreciated by 0.17 per cent, 0.15 per cent, 0.58 per cent, 2.10 per cent, 2.45 per cent, 1.22 per cent, 3.12 per cent, and 3.22 per cent, apiece, as the ASeM, growth and sovereign bond indices closed flat.
Business Post reports that Customs Street printed 33 price gainers, 29 price losers, and 95 price flatters in the week, in contrast to the 25 price gainers, 24 price losers and 108 price flatters recorded the earlier week.
Airtel Africa was the worst-performing stock as its value went down by 27.10 per cent to N1,312.20, NEM Insurance lost 9.98 per cent to trade at N4.42, Beta Glass also depreciated by 9.98 per cent to N41.50, Royal Exchange fell by 9.78 per cent to 83 Kobo, and MRS Oil lost 9.76 per cent to close at N12.95.
The best-performing stock for the week was Academy Press, which rose by 11.45 per cent to N1.46, Fidelity Bank gained 10.14 per cent to sell for N3.80, United Capital appreciated by 10.13 per cent to N12.50, BUA Cement improved by 9.73 per cent to N62.00, and PZ Cussons stretched by 9.52 per cent to N9.20 per cent.
In the five-day trading week, traders bought and sold 938.020 million shares worth N16.701 billion in 15,700 deals as against the 491.815 million shares worth N11.922 billion transacted in 14,350 deals a week earlier.
Financial equities dominated the activity chart with 501.278 million units valued at N5.080 billion carried out in 8,279 deals, accounting for 53.44 per cent and 30.42 per cent of the total trading volume and value, respectively.
ICT stocks trailed with 316.347 million units valued at N8.729 billion executed in 1,249 deals, while energy shares recorded the sale of 28.244 million units worth N983.561 million in 846 deals.
A breakdown indicated that CWG, GTCO and Fidelity Bank attracted most of the transactions, with 490.324 million units worth N2.905 billion traded in 2,860 deals, contributing 52.27 per cent and 17.39 per cent to the total trading volume and value, respectively.
By Dipo Olowookere
About 0.04 per cent was recovered on Friday from the loss recorded by the Nigerian Exchange (NGX) the previous due to profit-taking.
Yesterday, investors were in the market with renewed vigour, mopping up stocks trading at relatively cheaper prices.
According to data, the insurance counter gained 0.41 per cent, the banking sector appreciated by 0.38 per cent, and the consumer goods index grew by 0.14 per cent.
The gains achieved by these three sectors were enough to lift Customs Street at the close of business despite the 0.26 per cent decline printed by the industrial goods segment and the 0.14 per cent loss suffered by the energy industry. The commodity counter was flat during the session.
A total of 43 equities gained weight on the last trading day of this week, while 26 equities shed weight, indicating a positive market breadth index and strong investor sentiment.
Red Star Express increased its share price by 10.00 per cent to N13.20, NCR Nigeria grew by 9.97 per cent to N128.55, SCOA Nigeria inflated by 9.96 per cent to N14.90, Omatek appreciated by 9.94 per cent to N1.77, and Deap Capital expanded by 9.85 per cent to N4.46.
On the flip side, McNichols decreased by 8.81 per cent to N6.00, Legend Internet crumbled by 7.56 per cent to N5.50, Cornerstone Insurance crashed by 6.48 per cent to N6.35, C&I Leasing contracted by 6.29 per cent to N8.20, and Austin Laz slipped by 5.78 per cent to N3.75.
Yesterday, 539.9 million shares valued at N16.7 billion were transacted in 48,023 deals versus the 1.0 billion shares worth N31.6 billion executed in 51,227 deals in the preceding day, implying a shrink in the trading volume, value, and number of deals by 46.01 per cent, 47.15 per cent, and 6.26 per cent apiece.
Zenith Bank was the most active for the day with 54.6 million stocks sold for N3.8 billion, Jaiz Bank traded 41.5 million units worth N359.4 million, Secure Electronic Technology transacted 37.7 million units valued at N39.2 million, Access Holdings exchanged 30.5 million units for N699.2 million, and Lasaco Assurance transacted 27.2 million units worth N68.3 million.
When the market closed for the day, the All-Share Index (ASI) went up by 72.21 points to 166,129.50 points from 166,057.29 points and the market capitalisation gained N31 billion to N106.354 trillion from N106.323 trillion.
By Adedapo Adesanya
It was a positive ending for the Naira this week after it further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, January 16 by N1.33 or 0.09 per cent to sell for N1,417.95/$1 compared with the previous day’s N1,419.28/$1.
The domestic currency also gained N2.41 against the Euro in the official market to close at N1,647.51/€1 versus the preceding session’s closing price of N1,649.92/€1, however, it suffered a N7.97 loss against the Pound Sterling in the same market window to trade at N1,901.32/£1, in contrast to Thursday’s closing price of N1,893.35/£1.
In the same vein, the Nigerian Naira depleted against the Dollar at the GTBank FX counter by N2 to quote at N1,427/$1 compared with the previous day’s N1,425/$1, but strengthened against the greenback at the black market yesterday by N5 to settle at N1,485/$1 versus the N1,490/$1 it was exchanged a day earlier.
Improved supply conditions helped keep the market within range as exporters’ and importers’ inflows in addition to non-bank corporate supply enhanced liquidity as the Central Bank of Nigeria (CBN) made no visible intervention.
Stronger external inflows from foreign portfolio investors (FPIs) and improving current account dynamics, continue to align with structural support in the wider economy.
Nigeria has seen projections of a stronger economic or gross domestic product (GDP) growth and lower inflation in 2026, with these forecasts citing improved macroeconomic fundamentals and reform impacts.
As for the cryptocurrency market, it was mixed following selloff in precious metals and lower US stocks appeared to be denting crypto sentiment.
Gold and silver, both of which also enjoyed big rallies earlier this week, tumbled 1.2 per cent and 5 per cent, respectively while key US stock indexes — the Nasdaq, S&P 500 and Dow Jones Industrial Average — all reversed from early gains to modest losses in Friday trade.
Dogecoin (DOGE) shrank by 2.2 per cent to $0.1370, Ripple (XRP) slipped by 0.8 per cent to $2.05, Ethereum (ETH) went down by 0.7 per cent to $3,228.56, and Bitcoin (BTC) slumped by 0.6 per cent to $95,086.80.
Conversely, Litecoin (LTC) appreciated by 3.2 per cent to $74.48, Solana (SOL) rose by 0.4 per cent to $143.70, Cardano (ADA) jumped by 0.2 per cent to $0.3942, and Binance Coin (BNB) increased by 0.1 per cent to $935.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher amid lingering worries about a possible US military strike against Iran, a decision that may still occur over the weekend.
Brent crude settled at $64.13 a barrel after going up by 37 cents or 0.58 per cent and the US West Texas Intermediate (WTI) crude finished at $59.44 a barrel after it gained 25 cents or 0.42 per cent.
The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.
Market analysts noted that it doesn’t seem likely anything will happen soon. However, the weekends have become the perfect time for actions so as not offset the markets.
The market had risen after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 per cent on Thursday as the American president said Iran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
Iran produces approximately 3.2 million barrels per day, accounting for roughly 4 per cent of global crude production, so it was not a coincidence that markets rallied sharply through Tuesday and Wednesday as President Trump canceled meetings with Iranian officials and posted that “help is on its way” to Iranian protesters, raising fears of potential US military strikes that sent prices surging toward multi-month highs.
Weighing against those fears are potential supply increases from Venezuela.
The Trump administration is exploring plans to swap heavy Venezuelan crude for US medium sour barrels that can actually go straight into Strategic Petroleum Reserve (SPR) caverns, since not all all oil belongs in the reserve.
According to Reuters, the Department of Energy is considering moving Venezuelan heavy crude into commercial storage at the Louisiana Offshore Oil Port, while US producers deliver medium sour crude into the SPR in exchange.
Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
Some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US.
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