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Nigerian Exchange Attracts N1.506trn Transactions in 5 months

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Customs Street Nigerian Stock Exchange

By Aduragbemi Omiyale

Transactions worth N1.506 trillion were attracted by the Nigerian Exchange (NGX) Limited from both local and offshore investors between January and May 2022, compared with the N933.65 billion recorded in the same period of last year, according to data from the bourse.

In a report released by NGX Regulation Limited on behalf of NGX, the Domestic and Foreign Portfolio Investment (FPI) May 2022 report captured these transactions as well as trading figures from market operators.

Additionally, domestic investors have continued to hold ground on the floor of the NGX despite rising inflation and currency volatility in the foreign exchange market, which remained key drivers of the domestic and foreign portfolio investment.

Further analysis has shown that foreign transactions stood at N201.29 billion, accounting for about 13.37 per cent of the total transactions carried out from January to May, while domestic transactions constituted N1.304 trillion, representing 86.63 per cent of the total transaction, outperforming the foreign investment during the same period.

Analysis of domestic transactions showed that institutional investors outperformed retail investors. A comparison of domestic transactions in the period under review revealed that retail transactions pulled N408.03 billion in investment, while institutional investors’ investment amounted to N896.21 billion from January to May 2022.

For May, total transactions at the nation’s bourse increased by 195.05 per cent from N205.88 billion (about $494.26 million) in April 2022 to N607.45billion (about $1.45 billion) in May 2022. The performance of the current month when compared to the performance in May 2021 (N97.19 billion) revealed that total transactions increased by 525.01 per cent. In May 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 86 per cent.

Subsequently, the total transactions executed between the current and prior month revealed that total domestic transactions increased by 214.40 per cent from N178.80 billion in April to N562.15 billion in May 2022. In contrast, total foreign transactions increased by 67.28 per cent from N27.08billion (about $65.01 million) to N45.30 billion (about $108.02 million) between April 2022 and May 2022.

However, the report revealed that “Over 15 years, domestic transactions decreased by 58.80 per cent from N3.556 trillion in 2007 to N1.465 trillion in 2021, while foreign transactions also decreased by 29.38 per cent from N616 billion to N435 billion over the same period.”

Consequently, the stock market regained more confidence at the start of the year, with key drivers like BUA Foods, listing on NGX; investors’ reaction to companies’ full-year earnings and dividend declarations; predominance of domestic players over foreign players in the market, and low yields in the fixed income market which forced investors to consider more profitable securities in the equity market.

Capital market analysts stated that local investors are taking advantage of the incredibly low prices of stocks in NGX to increase their investments.

They explained that local investors are increasing their stake in the equities market due to the attractive dividend yield in the market and because of the low yield environment in the fixed income market.

They observed that the development is good for the local bourse, saying that it would restore credibility and stability to the market, which was hitherto marred by volatility occasioned by the activities of foreign investors.

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Economy

FrieslandCampina Boosts NASD OTC Bourse by 0.08% at Midweek

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NASD OTC Bourse

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed in the positive zone by 0.08 per cent on Wednesday, June 29 driven by a bullish price movement from FrieslandCampina WAMCO Nigeria Plc.

The milk-producing company appreciated during the midweek session by 99 Kobo or 1.03 per cent to settle at N96.79 per share compared with the previous closing price of N95.80 per share.

The NASD OTC bourse recorded a price loser and it was Niger Delta Exploration and Production (NDEP) Plc, which depreciated by N6.21 or 3.14 per cent to N191.79 per unit from N198.00 per unit.

But the gains printed by FrieslandCampina offset the losses reported by NDEP as the market capitalisation expanded by N810 million to N1.005 trillion from N1.004 trillion, while the NASD Unlisted Securities Index (NSI) increased by 0.62 points to wrap the session at 763.24 points compared with the 762.62 points recorded in the previous session.

Securities worth N10.1 million were bought and sold by traders at the market on Wednesday compared with the N1.8 million securities transacted a day earlier, indicating an increase of 462.5 per cent.

However, the volume of the securities went down by 18.9 per cent as investors traded only 72,550 units, 18.9 per cent lower than the 89,440 units transacted in the preceding session.

The transactions were carried out in 20 deals as against the 11 deals executed on the bourse on Tuesday, implying a decline of 81.8 per cent rise.

AG Mortgage Plc remained the most traded stock by volume (year-to-date) with 2.3 billion units valued at N1.2 billion, Central Securities Clearing System (CSCS) Plc stood in second place with 674.4 million units worth N14.1 billion, while Food Concepts Plc was in third place with 146.5 million units valued at N127.2 million.

On the flip side, CSCS Plc was the most active stock by value (year-to-date) with 674.4 million units exchanged for N14.1 billion, VFD Group Plc was in second place with 10.9 million units worth N3.2 billion, while FrieslandCampina Plc was in third place with 9.7 million units valued at N1.3 billion.

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Economy

Crude Oil Drops as Economic Worries Offset Tighter Supply Signals

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crude oil export

By Adedapo Adesanya

Prices of crude oil were in red on Wednesday as worries about a weaker global economy offset data showing a weekly drawdown in crude stockpiles, indicating supplies remained tight.

Investors are also worried a slowing economy could dent energy demand as central banks hike interest rates to battle inflation, causing the price of the Brent crude to fall yesterday by 1.75 per cent or $2.06 to $115.90 per barrel, with the United States West Texas Intermediate (WTI) dropping 1.98 per cent or $2.21 to $109.50 a barrel.

US crude inventories fell last week even as production hit its highest level since April 2020 during the first wave of the coronavirus pandemic.

Even comments from the US central bank chief did nothing to quell the fear as prices went down.

The US Federal Reserve Chair, Mr Jerome Powell, announced that the economy would not be allowed to slip into a “higher inflation regime” even if it means raising interest rates to levels that put growth at risk.

The oil market had been propelled in the previous session as concerns over tight supplies due to Western sanctions on Russia outweighed fears that demand may slow in a potential future recession.

Analysts are concerned that Saudi Arabia and the United Arab Emirates (UAE) may not have enough spare capacity to make up for the lost Russian supply.

French President, Mr Emmanuel Macron, said this week he was told these producers will struggle to increase output further.

However, the UAE energy minister said the country, which is producing about 3 million barrels per day, has some spare capacity above its OPEC quota of 3.17 million barrels per day.

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies such as Russia, which form the OPEC+ group, began a series of two-day meetings on Wednesday and will hold its official meeting on Thursday.

There are no indications that there will be changes to the current level of output as was agreed earlier this month.

At its last meeting in early June, OPEC+ sped up production cuts and agreed to raise output each month by 648,000 barrels per day in July and August, up from earlier increases of 432,000 barrels per day.

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Economy

Naira Plunges to New Low at Spot Market, Trades N610/$1 at Parallel Market

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Spot Market

By Adedapo Adesanya

The Naira on Wednesday, June 29 depreciated to its lowest level in the Investors and Exporters (I&E) segment of the foreign exchange (FX) market.

Amid a biting forex crunch, the local currency fell by N3.88 or 0.80 per cent against the US Dollar to close at N424.88/$1 versus the N421.00/$1 it was sold on Tuesday despite a decline in the value of transactions at the spot market.

According to data from the FMDQ Securities Exchange, the turnover for the midweek session was $112.83 million, 45.4 per cent or $93.82 million lower than the turnover of $206.65 million published the day before.

Also, in the parallel market, the domestic currency reported a dismal performance against the greenback as it lost N1 to quote at N610/$1 compared with the previous day’s value of N609/$1.

However, the value of the Naira to the Dollar remained unchanged at the Peer-to-Peer market window at N619/$1.

In the interbank segment of the market, the Naira appreciated against the British currency – the Pound Sterling and the Euro.

Against the Pound Sterling, it was strengthened by N3.91 to N505.91/£1 from N509.82/£1 and against the Euro, it gained N1.90 to settle at N437.59/€1 versus N439.49/€1 on Tuesday.

Meanwhile, four of the 10 tokens monitored by Business Post closed in the green territory, with the TerraClassicUSD (USTC) recovering more grounds as it traded higher by 59.9 per cent to $0.0691. Dogecoin (DOGE) rose by 5.4 per cent to trade at $0.0707, Litecoin (LTC) went up by 1.9 per cent to settle at $54.15, while Bitcoin (BTC) added 0.3 per cent to its value to close at $20,315.78.

However, Binance Coin (BNB) recorded a 4.7 per cent fall to sell at $221.44, Ethereum (ETH) depreciated by 3.7 per cent to $1,116.72, Solana (SOL) decreased by 3.6 per cent to $34.68, Ripple (XRP) recorded a 1.9 per cent slide to sell for $0.3329, Cardano (ADA) dropped 0.2 per cent to trade at $0.4722, while the US Dollar Tether (USDT) moved downwards by 0.02 per cent to $0.9989.

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