Business
Investors rekindle interest in stocks as Naira strengthens
- Market cap crosses N11trn in 6 hours
- FBN, FCMB, 2 others lead
By Odunewu Segun
Trading activities on the floor of the Nigerian Stock Exchange came alive yesterday, Monday 5 with market capitalization appreciating from N10,845,347,307,117.93 at the weekend to N11,262,526,136,498.84 within six trading hours on Monday, National Daily findings has revealed.
Banking stocks were the most traded stocks at the exchange on Monday, with First Bank, FCMB, Fidelity, Zenith and Skye bank, leading the pack.
Nestle and Dangote Cement stayed strong as the top gainers, with a share price of N955 and N210 respectively — from N918.76 and N192.93 on Friday.
Lukman Otunuga, research analyst at FXTM, believes the upward trend is as a result of investors’ confidence in the Nigerian market.
“The subtle signs of stability remain visible with Nigeria’s stock exchange edging higher amid the improving sentiment while the one billion Federal Government Euro bond on the NSE continues to verify how confident foreign investors have become with regards to Nigeria’s future,” he said.
Meanwhile, National Daily investigations revealed that the naira appreciated against the dollar at the parallel market, exchanging for exchanging for N368/$ from the N370 it exchanged for at the weekend, while the pound and euro traded at N475 and N405 respectively.
Also, in a bid to boost liquidity in the currency market, the CBN introduced a new spread limit on interbank transactions on Monday, it said in a statement, in an attempt to boost liquidity in the currency market.
All interbank transactions will be subject to a maximum spread of 1 naira ($0.0033), the Central Bank of Nigeria (CBN) said. A year ago, the bank had said the naira would trade with no pre-determined spreads. The new rules take effect immediately, said the statement.
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In Monday’s statement, the CBN also said traders can buy hard currency from each other without its prior approval, which until now had been required. ($1 = 304.4800 naira)
The move, announced alongside a series of other new regulations, could help the bank improve liquidity in its troubled foreign exchange market, marred by a gap between the stronger official exchange rate and a weaker black market rate.
The CBN has tried to close that gap by pumping dollars into the market since February. In a separate statement, the bank said it had injected $190 million on Monday. That brings the total amount close to $5 billion, according to analyst estimates.
Monday’s injection included $100 million for wholesale, $50 million for small and medium enterprises and $40 million for business and travel allowances.
The CBN now operates at least seven exchange rates, including an official rate, one for Muslim pilgrims going to Saudi Arabia and a rate for foreign travel, school and medical fees.