Market Gains N29bn as CBN Reviews Forex Policy

• Market Gains N29bn as CBN Reviews Forex Policy

The Nigerian equities market appreciated by N29bn on Monday as the Central Bank of Nigeria released a new foreign exchange policy in the country with immediate effect.

The Nigerian Stock Exchange market capitalisation rose to N8.738tn from N8.709tn, while the NSE All-Share Index closed at 25,249.49 basis points from 25,164.91 basis points.

The new policy is the outcome of the last Thursday’s directive by the National Economic Council for immediate review to stem the widening gap between the inter-bank foreign exchange and parallel market rates.

The CBN said in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, it would henceforth be providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, with immediate effect.

The equities market started the week on a positive note, advancing by 0.34 per cent, to settle the year-to-date return at -6.05 per cent. There were 10 gainers and 18 losers.

A total of 110.016 million shares worth N985.667m were traded in 2,160 deals.

PZ was the top gainer for the second consecutive trading day, advancing by 9.04 per cent, to close at a year high of N14.60.

Diamond Bank Plc, Nascon Allied Industries Plc, Nigerian Breweries Plc and Caverton Offshore Support Group Plc also appeared on the top gainers’ list appreciating by 4.88 per cent, 4.55 per cent, 4.18 per cent and 3.33 per cent, respectively.

Meanwhile, Forte Oil Plc declined the most in share price by 5.02 per cent to close at N53.87. UACN Plc, Nigerian Aviation Handling Company Plc, Honeywell Flour Mill Plc and Neimeth International Pharmaceuticals Plc also appeared on the top losers’ table dropping by 4.95 per cent, 4.67 per cent, 4.55 per cent and 4.35 per cent, accordingly.

The NSE food and beverage index was the only index to close positive, with the oil/gas, banking and insurance indices declining by 0.63 per cent, 0.20 per cent and 0.11 per cent, respectively, while the industrial index traded flat.

Responding to the state of the market, analysts at Meristem Securities said, “The much expected upturn witnessed in the market today can be attributed to bullish activities on certain large-cap tickers, as well as intensified position-taking ahead of the 2016 financial year earnings releases and corporate actions.

“As we expect this to continue for most of the week, we advise value-seeking investors to temper their optimism with caution.”

Meanwhile, there was a decline in system liquidity, resulting in a 2.57 per cent increase in the average money market rate to 20.82 per cent, at the close of the trading session. The open buy-back and overnight rates rose by 2.67 per cent and 2.47 per cent, respectively, to settle at 20.50 per cent and 21.14 per cent, accordingly.

Activities in the Treasury bills space were characterised by bearish sentiments on February 17, 2017.

The one-month, three-month and six-month instruments recorded yield increases of 0.15 per cent, 0.02 per cent and 0.32 per cent, respectively. The average Treasury bills yield stood at 16.24 per cent (+0.16 per cent), at the close of Monday’s trades.

Similarly, in the treasury bonds space, yields advanced across most instruments, save for the March-2036, May-2018 and June-2019, which recorded declines of 0.04 per cent, 0.18 per cent and 0.03 per cent, accordingly. Consequently, the average bond yield increased by 0.12 per cent, to peg at 16.65 per cent at the close of trades.

The naira continued its downward trend at the parallel forex market, as it depreciated by 0.77 per cent, to settle at N520/dollar. However, the currency appreciated by 0.08 per cent at the interbank forex market, to close at N305.25/dollar.