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Naira stable at black market as bears reclaim stock market

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6 years ago

July 11, 2018

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The Nigerian Naira has retained its rate at the parallel market against Dollar, exchanging same rates of N361 against Dollar, N418 to Euro and N480 to Pound as it was on Monday, July 9.

The naira has remained stable across the foreign exchange market due to the intervention of the CBN.

Analysts at FSDH Merchant Bank Limited have said that Nigeria cannot afford another level of devaluation of the currency, saying this will worsen the nation’s debt position.

The total public debt increased to N22.71tn in the first quarter of 2018 from N12.60tn in the fourth quarter of 2015, according to the Debt Management Office.

In its latest monthly economic and financial markets outlook, FSDH research, noted that the growth in the debts stock was mainly driven by external debts and was accelerated by the devaluation of the naira.

Meanwhile, the bears reclaimed control of the Nigerian stock market to close 0.60 per cent lower Tuesday after a positive start on Monday. After a bear run the previous week, the market had started the new week with a marginal appreciation of 0.06 per cent on Monday.

However, the growth could not be sustained on Tuesday as bellwether tickers depreciated, dragging the Nigerian Stock Exchange (NSE) All-Share Index lower to 37,421.01, while market capitalisation fell to N13.56 trillion. As at the close of trading on Tuesday, the year-to-date decline of the NSE ASI is now 2.15 per cent.

Heavy weights such as Lafarge Africa Plc, GTBank Plc, Flour Mills of Nigeria Plc, Nigerian Breweries Plc and Zenith Bank Plc were among the stocks that caused the decline in the NSE ASI.

In all, 26 stocks declined, while only 12 stocks appreciated. Multiverse Mining and Exploration Plc and Mutual Benefits Assurance Plc with 9.1 per cent apiece, trailed by AXA Mansard Insurance Plc with 8.9 per cent.

On the positive side, Forte Oil Plc emerged the highest gainer, rising 9.9 per cent, trailed by Custodian Investment Plc that garnered 9.4 per cent.

According to market analysts, the current bearish trend will be sustained in the absence of an individual company news to drive positive price movements on counters.