Connect with us

Business

Nigerian Capital Market rebounds over new forex policy

Published

on

Spread The News

By CHIOMA OBINAGWAM

ACTIVITIES on the Nigerian Capital market witnessed a rebound at the close of the week ended June 17, 2016 after a somewhat protracted lull, on the heels of the release of a new Foreign Exchange (Forex Policy) by the Central Bank of Nigeria (CBN).

On the equities side, the two major measurement indicators- Nigerian Stock Exchange (NSE) All-Share Index and Market Capitalization appreciated by 7.40 per cent to close the week at 29,247.27 basis points (bps) and N10.01 trillion respectively.

In the same vein, all other indices finished higher during the week, with the exception of the NSE Alternative Securities Market (ASeM) Index, that declined by 0.17 per cent.

Recall that the CBN announced a new Forex policy on Wednesday, June 15, 2016, which among other modification, include the participation of the CBN in the Forex market through a single market to be operated through the interbank.

ALSO SEE: Naira slides to N376/$1 as NSE index crashes by 0.47%

Analysts at Cowry Asset Management say that the rebound was mainly due to the announcement of the policy. More so, a review of activities on the Nigerian bourse, shortly after the announcement, showed that the NSE All-Share Index increased by 857.90 bps or 3.17 per cent.

An All-Share index is a series of numbers which shows the changing average value of the share prices of all companies on a stock exchange, which is used as a measure of how well a market is performing.

Although the index recorded a steady increase riding on the back of the new Forex Policy, the Managing Director of Cowry Asset Management, Johnson Chukwu is quite skeptical of the sustainability of the upward trend.

He is of the view that the trend would be prolonged if the country is able to transform its economic policies to be market oriented, in addition to stemming the rising tide of insecurity in the country, among other factors.

As usual, the Financial Services Industry (measured by volume) led the activity chart with 1.94 billion shares valued at N12.39 billion traded in 16,023 deals; thus contributing 89.85 per cent and 60.77 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 77.42 million shares worth N4.75 billion in 3,489 deals.

The third place was occupied by the Conglomerates Industry with a turnover of 74.44 million shares worth N412.72 million in 1,018 deals. Trading in the Top Three Equities namely United Bank For Africa Plc, FBN Holdings Plc and Zenith Bank Plc. (measured by volume) accounted for 1.00 billion shares worth N6.78 billion in 7,153 deals, contributing 46.37 per cent and 33.23 per cent to the total equity turnover volume and value respectively.

Trending