NSE LIVE! Equities regain rally as CBN relaxes forex rules

Nigerian equities firmed up on Tuesday as the Central Bank of Nigeria (CBN) in a surprising move dumped its fixed foreign exchange policy and adopted a flexible exchange rate. Most quoted companies on the Nigerian Stock Exchange (NSE) that had price changes closed on the upside, leaving equities with net gain of N74 billion.

Aggregate market value of all quoted equities rose from its opening value of N9.279 trillion to close at N9.353 trillion. The All Share Index (ASI)-a value-based common index that tracks prices of all quoted equities, trended upward to 27,231.50 points from its opening index of 27,015.97 points, representing average day-on-day gain of 0.80 per cent.

With 25 gainers to 18 losers, most indices underscored widespread bullish sentiments. The NSE Consumer Good Index rose by 0.8 per cent. The NSE Banking Index and the NSE Industrial Goods Index appreciated by 0.7 per cent each while the NSE Oil & Gas Index inched up by 0.04 per cent. However, the NSE Insurance Index slipped by 0.4 per cent.

The uptrend helped to reduce the negative average year-to-date return to -4.93 per cent.

Dangote Cement, NSE’s most capitalised stock, led the gainers with a gain of N2.92 to close at N170.01. Nigerian Breweries, NSE’s second most capitalised stock, followed with a gain of N2.31 to close at N127.61. Ecobank Transnational Incorporated rose by 48 kobo to close at N15.60. Vitafoam Nigeria appreciated by 30 kobo to close at N4.60 while Nigerian Aviation Handling Company (Nahco) rose by 22 kobo to close at N4.78.

Total turnover stood at 274.21 million shares valued at N1.54 billion in 4,160 deals. The three most active stocks were FBN Holdings, with 81.82 million shares; United Capital, 28.349 million shares and Access Bank, which recorded turnover of 28.348 million shares.

“Following the announcement of the MPC to introduce some level of flexibility into the forex market, we expect market momentum to strengthen in sessions ahead,” Afrinvest Securities stated.

Most analysts viewed the decisions of the Monetary Policy Committee (MPC) of the CBN to leave key rates unchanged while introducing a flexible foreign exchange policy as positive for the equities market.

“We expect capital market activities to witness gradual recovery as foreign exchange risk diminishes with the adoption of a more flexible exchange rate regime,” Cowry Asset Management stated.

Financial Derivatives Company stated that with the MPC’s decision to adopt a flexible foreign exchange framework, the CBN has accepted market realities and there could be increased dollar inflow in the next few days as the CBN announces the new market guidelines.

 

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