Economy
Reps to Investigate Reason for Declining Value of Naira
By Dipo Olowookere
The recent decline in the value of Naira at the foreign exchange (FX) market, especially at the unregulated segment, is becoming worrisome to the lower chamber of the National Assembly.
On Tuesday, the matter was tabled before the green arm of the parliament by a member of the House representing Jere Federal Constituency, Borno State, Mr Satomi Ahmed, under a matter of urgent national importance.
In his motion, which was seconded by Mr Idem Unyimen, he argued that if nothing was done to bring the situation under control, the nation may suffer for it.
According to him, if the value of the local currency continues to depreciate against key foreign currencies like the United States Dollar, the British Pound Sterling and the Euro, the nation’s economy may slip into crisis.
He said there’s a need for an urgent intervention to save the Naira that seems to be going into obscurity despite interventions by the Central Bank of Nigeria (CBN) to shore its value against other currencies.
The central bank, in an effort to save the Naira, does regular interventions by boosting FX liquidity in the market through the sale of forex to traders to meet the demands of customers. It also further introduced a promo called Naira 4 Dollar, which allows beneficiaries of diaspora remittances to receive N5 for every $1 sent to them.
The scheme, which was introduced on March 8, 2021, and was supposed to end on May 8, 2021, was later extended indefinitely.
But at the plenary today, after Mr Ahmed moved his motion, another lawmaker, Mr Toby Okechukwu, proposed an amendment to the motion, noting that the situation does not require a legislative summit over the issue as neither Foreign Direct Investments (FDIs) are coming to Nigeria nor the insecurity challenges facing the country abating.
He emphasised that the state of the Naira was a matter of market forces and then suggested that the House should launch an investigation into the circumstances behind the unabating falling value of the Naira.
This amendment to the motion was seconded by Mr Wale Raji and was voted and adopted as amended.
In recent times, the Naira has slumped significantly against the US Dollar at the FX market, forcing the CBN to devalue the domestic currency.
The most recent one was the adjustment of the interbank exchange rate to N410/$1 from N379/$1 as the apex bank adopted the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) rate as the official exchange rate.
The NAFEX rate is used by investors through the Investors and Exporters (I&E) window and at the close of business today, the Naira was traded at 411.75/$1 in contrast to N411.50/$1 it traded on Monday, indicating that it depreciated by 25 kobo or 0.06 per cent.
But at the black market, the Nigerian currency closed flat against the greenback at N505/$1 on Tuesday
At the moment, Nigeria operates these three exchange rate segments despite calls for a unified exchange rate regime from different quarters, including from the International Monetary Fund (IMF).
By Adedapo Adesanya
Three securities lifted the NASD Over-the-Counter (OTC) Securities Exchange by 1.38 per cent on Friday, July 3, with the NASD Security Index (NSI) up by 58.80 points to 4,307.26 points from 4,248.46 points, and the market capitalisation closing higher by N35.30 billion to N2.585 trillion from N2.549 trillion.
The price gainers were led by 11 Plc, which expanded by N20.05 to close at N220.55 per share compared with the previous day’s N200.50 per share, FrieslandCampina Wamco Nigeria Plc increased by N5.36 to N151.82 per unit from N146.46 per unit, and Central Securities Clearing System (CSCS) Plc appreciated by N3.52 to N90.74 per share from N87.22 per share.
Yesterday, the value of transactions surged by 1,431.2 per cent to N160.1 million from the preceding session’s N10.5 million, and the volume of trades rose by 303.7 per cent to 1.8 million units from 440,653 units, while the number of deals decreased by 34.4 per cent to 21 deals from 32 deals.
Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 70.7 million units transacted for N4.9 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Dipo Olowookere
The losing streak on the Nigerian Exchange (NGX) Limited was halted on Friday after the bourse closed higher by 2.19 per cent at the close of trading activities.
The gains reported by Nigerian stocks were buoyed by renewed bargain-hunting by investors, which resulted in all the key sectors of Customs Street ended in the green territory.
The banking space rose by 2.78 per cent, the insurance counter appreciated by 1.26 per cent, the energy segment expanded by 0.36 per cent, the consumer goods index chalked up 0.06 per cent, and the industrial goods sector grew by 0.05 per cent.
Consequently, the All-Share Index (ASI) went up by 4,918.37 points to 229,240.34 points from 224,321.97 points, and the market capitalisation increased by N3.156 trillion to N147.103 trillion from N143.947 trillion.
Investor sentiment was bullish after 34 stocks ended on the price gainers’ chart and 18 stocks finished on the losers’ log, representing a positive market breadth index.
The quintet of The Initiates, Universal Insurance, DAAR Communications, Omatek, and Airtel Africa surged by 10.00 per cent to sell for N25.85, 88 Kobo, N1.65, N1.76, and N5,274.00, respectively.
On the flip side, International Energy Insurance lost 9.96 per cent to trade at N4.70, Meyer shed 9.95 per cent to close at N18.55, Veritas Kapital dropped 5.07 per cent to finish at N1.31, Fidelity Bank slipped by 2.17 per cent to N18.00, and Jaiz Bank crashed by 1.84 per cent to N28.12.
During the session, a total of 414.7 million equities worth N25.1 billion exchanged hands in 47,106 deals compared with the 855.4 million equities valued at N28.4 billion transacted in the preceding day in 51,609 deals, implying a contraction in the trading volume, value, and number of deals by 51.52 per cent, 11.62 per cent, and 8.73 per cent, respectively.
By Adedapo Adesanya
The Naira closed flat against the United States Dollar at N1,370.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 3.
However, it appreciated against the Pound Sterling in the same market segment by N2.29 to settle at N1,829.88/£1 compared with the previous day’s N1,832.17/£1, and marginally depreciated against the Euro by 4 Kobo to close at N1,568.32/€1 versus Thursday’s closing price of N1,568.28/€1.
At the parallel market, the Naira also traded flat against the US Dollar at N1,390/$1, and at the GTBank forex desk, it also maintained stability at N1,832/$1.
Market conditions improved shortly after the following minimal intervention by the Central Bank of Nigeria (CBN) through modest Dollar sales, which boosted liquidity and supported stronger trading activity.
Easing pressure came after half-year profit-taking tapered down, while continued stronger policy signals from the central bank add to near-term support.
Deals executed at the official market on Friday came in at $70.430 million across 82 interbank deals, from $85.517 million the previous day.
Meanwhile, the cryptocurrency market continued its recovery after June non-farm payrolls printed at 57,000, less than half the 113,000 consensus, sending the implied probability of a September Federal Reserve rate hike from 64 per cent to 54 per cent and dragging AI stocks sharply lower.
Weak labour data reduces inflationary pressure and, by extension, the Federal Reserve’s justification for holding rates elevated. That transmission mechanism is direct: lower rate-hike odds compress the opportunity cost of holding non-yielding assets like crypto.
Bitcoin regained the $62,000 mark after it rose by 1.3 per cent to $62,475.29.
Cardano (ADA) gained 6.6 per cent to trade at $0.1759, Ripple (XRP) appreciated by 3.5 per cent to $1.14, Ethereum (ETH) expanded by 2.4 per cent to $1,756.82, Dogecoin (DOGE) improved by 2.1 per cent to $0.0768, Solana (SOL) chalked up 1.8 per cent to $82.65, TRON (TRX) increased by 1.5 per cent to $0.3235, and Binance Coin (BNB) soared by 1.4 per cent to $569.12, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
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