According to report after today transaction on the floor of the stock exchange, the bulls resurfaced on the domestic bourse, with the All Share Index recording its second biggest gain (1.05%) of the month to close at 25,533.82 points. Today’s gain is reflective of bargain hunting across major counters, following two consecutive sessions of selloffs. The gain experience in the market followed the selloff that took place in the previous days of trading on the floor of the exchange.
Driven by today’s impressive performance, the Month-to-Date (+0.81%) return has reversed yesterday’s fall into negative while the Year-to-Date loss was significantly pared to 4.99%.
Banking stock carry the day as investors were largely upbeat on Banking (+1.16%) stocks, with UBA (+2.86%), ZENITHBANK (+1.60%), and GUARANTY (+0.60%) attracting the most interest. Manufacturing shares similarly recorded price appreciations, with CADBURY (+5.00%), UNILEVER (+4.66%), DANGCEM (+1.85%), and WAPCO (+0.39%) being in the spotlight, consequently bolstering the Consumer Goods (+0.63%) and Industrial Goods (+1.01%) indices. Also, the Insurance (+0.43%) and Oil & Gas (+0.75%) indices benefitted from gains recorded by CONTINSURE (+4.72%) and OANDO (+2.48%) respectively.
Market breadth remained positive, with 24 gainers (previously 21) versus 9 losers (previously 15). Total volume traded fell by 54.38% to 352.00 million shares, valued at N2.45 billion and exchanged in 2,438 deals.
We expect gains to be sustained in the coming session. But this can only be sustained with solid fundamentals. In a related development, it was reported that the central bank would offer USD100 million in currency forwards – to be settled within 60 days – today. In addition, the apex bank intervened with $1.5 million on the spot market. That said, the LCY – in the interbank market – appreciated by 0.03% and 3.16% against the USD and EUR to N306.40 and N329.53 respectively while it depreciated by 1.23% against the GBP at N394.43. In the parallel market, the NGN strengthened by 1.06% against the GBP to N465 while it weakened by 0.79% and 2.50% against the USD and EUR to N383 and N410 respectively.
We have always said that this CBN intervention on the Foreign Exchange market will only sustain the stability of the Naira temporarily because the underlying factors that can strengthen the Naira are not put in place. The fluctuations of the Naira, dollar changes will continue until proper measure are put in place to boost the Nigeria economy. The government of the day need to do more to put things on the right side.
featured image is from google image.