August 29, (THEWILL) – Nigeria’s equities market attained its peak level on Tuesday as the all-share index, which measures the overall performance of equities, climbed 0.5 per cent to 66,490.34 basis points as against 66,151.38 points on Monday. It was the highest since March 2008.
Market capitalisation climbed to N36.40 trillion from N36.2 trillion at the previous day’s trading, yielding a N185.5 billion gain for investors.
Analysts attribute the bullish trend on the back of a series of market-friendly reforms helping Africa’s largest economy restore investor confidence to its markets.
However, a top market trader and Doyen of the Nigerian Stockbrokers, Sam Ndata, said the boom in the equities market represents the shift from the fixed income window and acquisition of physical properties by the political class to stocks.
According to him, since the anti-graft agencies stepped up their surveillance over money-laundering and other financial crimes, many of the politicians have found the stock market a safe haven to dump their wealth.
A financial analyst, Jerome Akannor, said investors are taking positions in the stocks of companies with good dividend-paying history as we move towards the fourth quarter of the year.
Check showed that demand for a good number of consumer goods stocks also helped gains in that sector, with equities adding N348 billion at the end of trade.
“We project mixed sentiments toward listed equities, with some investors’ continuing their cherry-picking activities around fundamentally sound stocks with strong potentials in terms of recently disclosed corporate actions,” said analysts at United Capital.
Meanwhile, the naira plunged to N775.34/$ at the I&E window on Tuesday while it hit N920/$ at the parallel market. Market turnover rose to $71.32 million against $40.21 million on Monday, a jump of 77.4 percent.
The severe FX shortage has made the naira maintain a depreciation trend, since June 14, when the CBN aggregated all the exchange rate windows into the I&E window
Analysts at Proshare opined that the country’s focus should be tilted towards improving oil and non-oil exports to boost FX supply in the interim. “Once the FX inflow improves, the outrageous speculative FX demand, pulling down the naira, should wane,” they said in a note.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
