Nigeria’s Foreign exchange ( forex) reserves declined for the nineteenth consecutive week, decreasing by $34.25 million w/w to $33.24 billion (28 September) – the lowest level since July 2021.
The naira also depreciated by 1.0 per cent to N755.27/dollar at the I&E window (IEW), with total turnover at the window (as of 28 September) decreasing by 46.4 per cent WTD to $344.67 million as trades were consummated within the N590.00 – NGN851.00/USD band.
Also in the forwards market, the naira recorded depreciation on the 1-month (-1.2 per cent to N791.13/dollar), 3-month (-1.0.per cent to N803.09/dollar), 6-month (-0.7 per cent to N820.86/dollar) and 1-year (-1.0 per cent to N876.74/dollar) contracts.
According to analysts at Codros Securities, the narratives in the forex market have remained the same in recent weeks, following a slow down in forex reform.
” Hence, barring any significant positive developments, we expect the lingering low crude oil production and a sustained dip in foreign investors’ net flows to weigh on FX supply in the short term.
“Consequently, we expect FX liquidity constraints to linger in the near term, ensuring the local currency pressures remain intact,” it added.
Meanwhile, the financial services industry dominated in volume terms at the end of last week’s transactions on the floor of the Nigerian Exchange Limited (NGX).
It led the activity chart with
940.539 million shares valued at N11.4 billion traded in 14,627 deals; thus contributing 70.3 percent to the total equity turnover volume and value respectively.
The conglomerates industry followed with 95.9 million shares worth N584.2 million in 1,760 deals. The third place was the oil and gas industry, with a turnover of 69.3 million shares worth N782.3 million in 1,688 deals.
Trading in the top three equities namely Access Holdings Plc, United Bank for Africa Plc and
Transnational Corporation Plc (measured by volume) accounted for 456.5 million shares
worth N6.5 billion in 6,579 deals, contributing 34.1 per cent and 36.1 per cent to the total equity
turnover volume.
On the price movement chart, market opened for four trading as the Federal Government of Nigeria declared Wednesday September 27, 2023 as Public Holiday to commemorate Eid-el-Maulid celebration.
It recorded losses in all four trading sessions of the week, following profit-taking activities in Buacement (-11.9.per cent) and MTNN (-1.9 per cent) stocks, causing the All-Share index and market capitalisation to depreciate by 1.4 per cent to close the week at 66,382.14 and N36.331 trillion respectively.
Similarly, all other indices finished lower with the exception of NGX Insurance, NGX
Consumer Goods, NGX Lotus ll, and NGX Sovereign Bond which appreciated by 2.77 percent,
1.59 percent, 0.20 percent and 0.98 per cent respectively while the NGX ASeM index closed flat.
Consequently, the Month-to-Date and Year-to-Date returns settled at -0.3 per cent and +29.5 per cent respectively.
Further breakdown of last week’s transactions showed that a total turnover of 1.3 billion shares worth N17.9 billion was recorded in 27,874 deals by investors on the floor of the Exchange, in contrast to a total of 3.9 billion units valued at N30.4 billion that was exchanged in 38,536 deals during the week ended September 22, 2023.
Reacting on market performance, anaysts at Codros Capital said: “In the short term, we anticipate cautious trading in the local stock market due to the absence of significant positive catalysts to boost sentiments.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
Vetiva Dealings and Brokerage said: “With bearish sessions dominating this month, the market lost 0.25 per cent, compared to the 3.44 per cent return in August.
“With no positive driver in the market, we anticipate similar mixed trading sessions next week, as investors begin to look forward to Q3 earnings report.”
A total of 19,020 units Exchange Traded products (ETPs)valued at N2.007 million were traded last week in 91 deals compared with a total of 51,116 units valued at N4.485 million exchanged in 112 deal during the preceding week.
Also, 80,697 units of bonds valued at N82.919 million were traded last week in 15 deals compared with a total of 95,921 units valued at N98.305 million transacted in 27 deals.
25 equities appreciated in price during the week lower than 48 equities in the previous week. 47 equities depreciated in price higher than 40 in the previous week, while 83 equities remained unchanged, higher than 67 recorded in the previous week.
