But on the positive side, naira continues to hold steady against its peers, trading around N1000 to a dollar at the weekend. In Abuja and Lagos markets, most traders were quoting N950/$ for buying and N1050/$ for selling at the weekend.
Overall, sentiments remain positive and strong for naira even as some market operators believe the sharp naira appreciation that followed the Central Bank of Nigeria’s (CBN) commencement of settlement of matured foreign exchange (FX) forwards was the beginning of a new era.
In the short to medium-term, according to analysts, the outlook of the local currency is bullish. This new confidence has kept speculators at bay with many dealers accumulating cautiously.
The CBN, on Thursday, reportedly commenced the payment of outstanding FX commitments with CitiBank, Stanbic IBTC and Standard Chartered Bank, the biggest players in FX business, said to have been credited. The overdue forward contracts were estimated at $6.7 billion.
Sources privy to the new policy direction of the new CBN management told The Guardian at the weekend that the payment marked a series of “deliberate action plans” that would shore up the value of naira in the coming months.
Yet, sceptics have continued to question the capacity of the CBN to sustainably and promptly fulfill its FX obligations in the face of dwindling supply.
According to data obtained from FMDQ Securities Exchange, FX inflows from local investors last month dipped by 14.6 per cent m/m to $1.07 billion in October as opposed to $1.26 billion recorded in September amid significant declines in the CBN (-94.8 per cent m/m), and Individuals (-99 per cent m/m) inflows.
Meanwhile, inflows from foreign sources settled higher by 182.9 per cent m/m to $158.7 million, although still significantly below the pre-pandemic average of $1.28 billion.
Reacting to the development, analysts at Codros Capital market said: “Looking ahead, we expect FX liquidity conditions to improve slightly, albeit still frail relative to historical levels as it appears the CBN has regained its momentum regarding FX reforms. Nonetheless, we expect foreign investors to be keenly watching the development in the FX space about the expected FX inflows as guided by the authorities, CBN’s recent actions in clearing its FX backlogs and firm direction of short-term interest rates.”
Meanwhile, listings on Nigerian Exchange Limited (NGX) crossed the N6 trillion mark at the end of October amid the uptick in capital market activity in the second half of 2023.
According to the X-Compliance report of NGX Regulation Limited (NGX RegCo), total equity, fixed income, exchange-traded funds and mutual funds listed on NGX year-to-date as of October ending totalled N6.23 trillion. This was majorly because of fixed income listings by the Federal Government of Nigeria which rose drastically in October.
FGN fixed income listings consist of FGN Bonds, FGN Savings Bonds and Sukuk bonds. This amounted to N6.08 trillion YTD. Also, the exchange admitted VFD Group and Nigeria Infrastructure Debt Fund (NIDF) at market capitalisations of N46.5 billion and N92.54 billion respectively, in October representing the major equity listings on NGX in 2023.
According to the exchange, the Lagos State Government remains the only sub-national entity to raise capital on the exchange as its debt issuances hit N157.15 billion. Other notable listings came from Dangote Industries Funding Plc, LFCZ Funding SPV Plc among others.
This also comes amid the strong performance in the equity secondary market, as the All-Share Index of NGX crossed the 70,000 mark with a 36.67 per cent YTD rise. Investors, both local and domestic, continue to observe the market dynamics amid a drastic shift in monetary and fiscal policy.
On the equities segment, a turnover of 2.4 billion shares worth N40.6 billion was recorded in 37,959 deals by investors on the floor of the Exchange, in contrast to a total of 1.4 billion units valued at N25.4 billion that changed hands in 28,933 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.5 billion shares valued at N21.1 billion traded in 16,671 deals; thus contributing 60.4.pwe cent to the total equity turnover volume.
The oil and gas industry followed with 354.9 million shares worth N1.2 billion in 2,917 deals. The ICT industry ranked third with a turnover of 175.2 million shares worth N8.2 billion in 3,759 deals.
Trading in the top three equities namely Japual Gold & Ventures Plc, United Bank for Africa Plc and Fidelity Bank Plc (measured by volume) accounted for 835.6 million shares worth N8.6 billion in 5,514 deals, contributing 34 per cent to the total equity turnover volume.
Analysts at Codros Capital said: “In the week ahead, we expect investors to continue to rotate their portfolios toward stocks that reported strong earnings this week.
“Thus, we see scope for the bulls to maintain dominance, though the magnitude of the gains may be lower, as profit takers are likely to book profits.
“Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings.”
Comercio Partners said: “Looking forward, we anticipate a continuation of similar market dynamics in the upcoming trading session.” On the price movement chart, positive sentiments intensified as investors cherry-picked stocks driven by positive sentiments surrounding FX liquidity
According to data obtained from FMDQ Securities Exchange, FX inflows from local investors last month dipped by 14.6 per cent m/m to $1.07 billion in October as opposed to $1.26 billion recorded in September amid significant declines in the CBN (-94.8 per cent m/m), and Individuals (-99 per cent m/m) inflows.
Meanwhile, inflows from foreign sources settled higher by 182.9 per cent m/m to $158.7 million, although still significantly below the pre-pandemic average of $1.28 billion.
Reacting to the development, analysts at Codros Capital market said: “Looking ahead, we expect FX liquidity conditions to improve slightly, albeit still frail relative to historical levels as it appears the CBN has regained its momentum regarding FX reforms. Nonetheless, we expect foreign investors to be keenly watching the development in the FX space about the expected FX inflows as guided by the authorities, CBN’s recent actions in clearing its FX backlogs and firm direction of short-term interest rates.”
Meanwhile, listings on Nigerian Exchange Limited (NGX) crossed the N6 trillion mark at the end of October amid the uptick in capital market activity in the second half of 2023.
According to the X-Compliance report of NGX Regulation Limited (NGX RegCo), total equity, fixed income, exchange-traded funds and mutual funds listed on NGX year-to-date as of October ending totalled N6.23 trillion. This was majorly because of fixed income listings by the Federal Government of Nigeria which rose drastically in October.
FGN fixed income listings consist of FGN Bonds, FGN Savings Bonds and Sukuk bonds. This amounted to N6.08 trillion YTD. Also, the exchange admitted VFD Group and Nigeria Infrastructure Debt Fund (NIDF) at market capitalisations of N46.5 billion and N92.54 billion respectively, in October representing the major equity listings on NGX in 2023.
According to the exchange, the Lagos State Government remains the only sub-national entity to raise capital on the exchange as its debt issuances hit N157.15 billion. Other notable listings came from Dangote Industries Funding Plc, LFCZ Funding SPV Plc among others.
This also comes amid the strong performance in the equity secondary market, as the All-Share Index of NGX crossed the 70,000 mark with a 36.67 per cent YTD rise. Investors, both local and domestic, continue to observe the market dynamics amid a drastic shift in monetary and fiscal policy.
On the equities segment, a turnover of 2.4 billion shares worth N40.6 billion was recorded in 37,959 deals by investors on the floor of the Exchange, in contrast to a total of 1.4 billion units valued at N25.4 billion that changed hands in 28,933 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.5 billion shares valued at N21.1 billion traded in 16,671 deals; thus contributing 60.4.pwe cent to the total equity turnover volume.
The oil and gas industry followed with 354.9 million shares worth N1.2 billion in 2,917 deals. The ICT industry ranked third with a turnover of 175.2 million shares worth N8.2 billion in 3,759 deals.
Trading in the top three equities namely Japual Gold & Ventures Plc, United Bank for Africa Plc and Fidelity Bank Plc (measured by volume) accounted for 835.6 million shares worth N8.6 billion in 5,514 deals, contributing 34 per cent to the total equity turnover volume.
Analysts at Codros Capital said: “In the week ahead, we expect investors to continue to rotate their portfolios toward stocks that reported strong earnings this week.
“Thus, we see scope for the bulls to maintain dominance, though the magnitude of the gains may be lower, as profit takers are likely to book profits.
“Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings.”
Comercio Partners said: “Looking forward, we anticipate a continuation of similar market dynamics in the upcoming trading session.” On the price movement chart, positive sentiments intensified as investors cherry-picked stocks driven by positive sentiments surrounding FX liquidity and corporate earnings.
The development propelled the equities market to hit the highest level on record as the All-Share Index and market capitalisation appreciated by 4.56 per cent to close at 70,196.77 and N38.557 trillion respectively.