PZ Cussons Nigeria Plc, NEM Insurance Company Nigeria Plc and John Holt Plc emerged as the top three losers at the close of trading on the floor of the Nigerian Stock Exchange on Monday, slashing market capitalisation by N17bn.
The NSE All-Share Index also dropped by 0.24 per cent, opening the week on a negative note following mixed performances across key sectors.
The NSE market capitalisation slid to N9.517tn from N9.534tn recorded on Friday last week.
A total of 195.024 million shares valued at N1.57bn exchanged hands in 3,221 deals.
Global markets traded higher following a rally in oil prices and as disappointing United States non-farm payroll data for August lowered expectations of a potential interest rate hike by the US Fed in September.
At the NSE, the industrial goods sector extended its downward trend amid continuous sell pressure in Dangote Cement Plc, which recorded a drop of 0.57 per cent. Consumer goods reversed previous session’s gains following losses in large capitalized firms like PZ (4.97 per cent loss) and Nigerian Breweries Plc (0.71 per cent loss).
Conversely, the financial services and the oil and gas sectors extended their positive run on the back of gains in Zenith bank Plc (1.01 per cent gain), United Bank for Africa (3.69 per cent gain), Diamond Bank Plc (4.46 per cent gain) and Oando Plc (2.10 per cent gain).
Market breadth turned negative with 13 advances and 21 declines.
To this end, analysts at Vetiva Capital Management Limited, said, “Notwithstanding some few periods of gains, the NSE ASI traded under water for most part of the trading session. Coupled with the mixed closing positions across key sectors, we expect market to remain volatile in the sessions ahead.”
Other losers at the close of trading were AIICO Insurance Plc, United Capital Plc, Unity Bank Plc, International Breweries Plc, Academy Press Plc, Africa Prudential Registrars Plc, FBN Holding Plc, Transnational Corporation of Nigeria Plc, Vitafoam Nigeria Plc, Champion Breweries Plc, among others.
The top three gainers were May and baker Nigeria Plc, Cutix Plc and Diamond Bank Plc.
CBN Forced Speculators, Hoarders to Sell Dollar Lower
The Central Bank of Nigeria’s new forex policy has forced many speculators and hoarders at the Nigerian parallel market popularly known as the black market to start bringing out their forex at an even lower price.
The Naira to United States Dollar exchange rate moderated from N500 to N470 earlier this morning across the nation’s black market.
Similarly, the local currency exchanged at N620 to a British Pound, an improvement from N640 it was sold on December 1, 2020.
The story is not different against the European common currency as it gained slightly to N570, up from N580 it sold on Tuesday.
The improvements recorded against global counterparts was after the CBN directed that henceforth recipients of foreign remittance can now receive such fund in foreign currency (US Dollar) in cash or through an ordinary domiciliary account.
This means the apex bank planned to inject $20 billion estimated diaspora remittances per year into the real sector of the economy to force hoarders to sell their dollars or lose substantially and also to curb forex dealers in the habit of buying forex directly from the recipient’s domiciliary account because of old CBN policy that restricted them from withdrawing foreign currency in cash.
With this old policy out of the way, recipients of foreign remittances can now withdraw foreign currency and exchange it at any of the registered bureau de change operators across the nation at N392 to a US dollar. The bureau de change rate set by the central bank.
Investors King expects the policy to fast track the recovery process and enhance economic activity across the board, especially at a time when importers are looking for forex to bring in goods in order to meet the usual December high demand.
Naira Exchange Rate Improves as CBN Plans to Flood Economy With $20 Billion Diaspora Remittances
The Naira to US Dollar exchange rate improved by N10 to N490 on Tuesday following the Central Bank of Nigeria’s new directive that allows recipients of diaspora remittances to receive their fund in foreign currency (US Dollar) or via their ordinary domiciliary account.
The move was after the apex bank blamed the parallel market for the wide foreign exchange rate and cautioned analysts for using speculative rates as the real Naira/US dollar rate.
Therefore, the apex bank decided to inject $20 billion annual diaspora remittances into the real sector of the economy and hurt the activities of unscrupulous individuals at the parallel market.
Investors King expects this to gradually moderate the nation’s foreign exchange rate against global counterparts, deepen business activities and fast track economic recovery.
CBN Amends Forex Receipt as Naira Hits Record Low
In a bid to simplify and finally liberalize the receipt of diaspora remittances, the Central Bank of Nigeria (CBN) has amended its receipt procedures to allow beneficiaries of diaspora remittances receive such inflows in foreign currency (US Dollars).
The apex bank stated in a circular signed by Dr. O.S. Nnaji, Director Trade and Exchange Department, CBN.
In the circular, recipients of remittances can now receive funds in either foreign currency cash (US Dollars) or into their ordinary domiciliary account.
While the International Money Transfer Operators (IMTOs) will henceforth receive diaspora remittances in foreign currency through the designated bank of their choice.
The CBN plans to ease forex scarcity, speed up the recovery process and checkmate the activities of speculators and hoarders at the black by injecting diaspora remittances estimated at about $20 billion per year into the real economy.
This is expected to not just improve business activities but also moderate foreign exchange rate from the current N500/US$ and move the central bank a step closer to unifying the nation’s foreign exchange rates.
The circular partly reads “In an effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, the Central Bank of Nigeria (CBN) wishes to announce as follows;
“Beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) or into their ordinary domiciliary account. Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.”
Nigerians to Start Receiving Remittance Inflows in Foreign Currency Today
Buhari Doubles Npower Beneficiaries to 1 Million, Increase GEEP by 1 Million, School Feeding by 5 Million
New Survey Shows Two-thirds of Millennials Sees Bitcoin as Safe-haven
Business2 months ago
Npower News on Permanency for Batch A, B
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Cryptocurrency3 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business3 months ago
FG to Absorb Exited N-power Beneficiaries into New Program
Business3 months ago
FG Approves Stipends for Exited N-Power Beneficiaries
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020