NSE LIVE! Equities in biggest rally as flexible forex policy kicks in

Nigerian equities staged their biggest day-on-day rally so far this year on Wednesday as investors continued to react to the adoption of a flexible exchange rate policy by the Central Bank of Nigeria (CBN) on Tuesday.

Benchmark indices at the Nigerian Stock Exchange (NSE) indicated that the stock market recorded a gain of 3.78 per cent, equivalent to capital gains of N354 billion on Wednesday. There appeared to be consensus that the new forex policy announced by the CBN on Tuesday was the major dirving force for the equities.

Nigerian stock market is dominated by foreign investors, who see forex policy as a major decision making tool.

Analysts at FSDH Securities said the upwardly market trend was due to “Central Bank’s announcement that it would adopt a more flexible exchange rate policy”.

Afrinvest Securities stated that investors’ sentiment “was clearly stoked by the decision of the MPC yesterday to introduce some flexibility in the forex market”.

Prices of most equities that witnessed change were on the upward while the momentum of trading also improved significantly. Aggregate market value of all quoted equities on the NSE improved from N9.352 trillion to close at N9.706 trillion. The All Share Index (ASI)-a value-based common index that tracks prices of all quoted equities, jumped from 27,231.50 points to close at 28,260.61 points. This helped to reduce the negative average year-to-date return to -1.33 per cent.

Aggregate turnover rose above average with the exchange of 474.402 million shares worth N3.50 billion in 5,260 deals. The three most active stocks were FBN Holdings, with 73.88 million shares; Zenith Bank, 48.23 million shares and Skye Bank, which recorded turnover of 45.88 million shares.

Read also: NSE LIVE! Equities regain rally as CBN relaxes forex rules

Sectoral review showed widespread positive sentiments. The NSE Banking Index rose by 5.9 per cent. The NSE Industrial Goods Index appreciated by 4.2 per cent. The NSE Consumer Goods Index rose by 3.3 per cent. The NSE Insurance Index improved by 1.5 per cent. However, the NSE Oil & Gas Index dropped by 0.1 per cent.

“Following the moves that have been made to address the forex challenges, we expect investors’ sentiments to remain upbeat hence we believe the positive performance in the market will be sustained as domestic investors continue to take position,” Afrinvest Securities stated.

 

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