Economy
Stocks Further Shed 0.17% as Investors Lose Confidence in CBN FX Policy
By Dipo Olowookere
Nigerian stocks received further beatings on Tuesday as investors began to lose confidence in the foreign exchange (FX) policy of the Central Bank of Nigeria (CBN).
On Monday, the acting CBN Governor, Mr Folashodun Shonubi, after a meeting with President Bola Tinubu at the State House in Abuja, said plans are being made to stabilise the Naira, warning that speculators will soon regret selling their local currency assets for Dollars.
He said this after the audit accounts of the apex bank for the 2022 fiscal year showed that what is left in the external reserves, about $20 billion, may not be enough to defend the Nigerian currency, triggering fears among some investors.
At the market yesterday, traders offloaded some of their equities, apparently in panic so as not to be caught off-guard. Some of them are selling to buy forex to edge their funds against Naira.
Business Post observed that apart from the insurance counter, which appreciated by 1.32 per cent, every other sector finished lower at the close of transactions.
The consumer goods space lost 0.68 per cent, the energy index depreciated by 0.40 per cent, the banking sector went down by 0.08 per cent, and the industrial goods counter finished lower by 0.06 per cent.
As a result, the All-Share Index (ASI) decreased by 107.39 points to 64,928.98 points from 65,036.37 points, and the market capitalisation moderated by N58 billion to N35.357 trillion from N35.415 trillion.
Eterna ended the trading session as the heaviest price loser as it shed 9.86 per cent to trade at N16.00, Sunu Assurance trended downward by 9.62 per cent to 94 Kobo, Omatek declined by 8.11 per cent to 34 Kobo, Unilever Nigeria slumped by 7.05 per cent to N14.50, and AIICO Insurance dropped 5.63 per cent to sell at 67 Kobo.
The biggest price gainer was Tantalizers as it improved by 10.00 per cent to 44 Kobo, Ikeja Hotel grew by 9.82 per cent to N3.13, Cornerstone Insurance expanded by 9.30 per cent to N1.41, The Initiates appreciated by 8.82 per cent to N1.11, and Linkage Assurance rose by 8.33 per cent to 91 Kobo.
At the close of business, there were 31 price losers and 19 price gainers, indicating a negative market breadth index and a weak investor sentiment.
Apart from the CBN policy, the market reacted to the inflation figures of July 2023 released by the National Bureau of Statistics (NBS) on Tuesday.
The agency revealed that the average price of goods and services increased on a year-on-year basis by 24.08 per cent. In the previous month, inflation rose by 22.79 per cent.
This may have also put the Nigerian Exchange (NGX) Limited under selling pressure yesterday, as the level of activity increased, with the trading volume, value, and the number of deals rising by 8.30 per cent, 11.91 per cent, and 6.73 per cent, respectively.
This was because the bourse recorded the sale of 280.5 million equities worth N4.7 billion in 6,296 deals compared with the 259.0 million equities worth N4.2 billion traded in 5,899 deals on Monday.
For another trading session, Transcorp was the most active after selling 36.5 million stocks valued at N147.5 million, followed by UBA, which sold 23.2 million shares for N325.4 million. Access Holdings transacted 17.7 million equities worth N299.4 million, Sterling Holdings exchanged 16.0 million shares worth N57.5 million, and Japaul traded 11.4 million stocks valued at N11.0 million.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 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 Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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