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FBN Holdings, GTBank, Access Bank most traded stocks W/W

The Nigerian bourse ended the week cumulatively on a less impressive note.

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The Nigerian bourse closed the trading session cumulatively bearish W/W, with the All Share Index dropping by 0.08% W/W, while market capitalization presently stands at N13.365 trillion.

  • A total turnover of 1.139 billion shares worth N12.692 billion in 17,109 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.226 billion shares valued at N10.842 billion that exchanged hands last week in 19,529 deals.
  • The Financial Services industry (measured by volume) led the activity chart with 870.300 million shares valued at N7.863 billion traded in 9,427 deals; thus contributing 76.43% and 61.95% to the total equity turnover volume and value respectively.
  • The Industrial Goods industry followed with 62.689 million shares worth N1.162 billion in 1,557 deals. In the third place was the ICT industry, with a turnover of 50.859 million shares worth N2.552 billion in 619 deals.
  • Trading in the top three equities, namely FBN Holdings Plc, Guaranty Trust Bank Plc, and Access Bank Plc. (measured by volume) accounted for 353.048 million shares worth N4.018 billion in 3,095 deals, contributing 31.00% and 31.66% to the total equity turnover volume and value respectively.
  • 32 equities appreciated at price during the week, higher than 23 equities in the previous week.
  • 31 equities depreciated in price, lower than 38 equities in the previous week, while 100 equities remained unchanged, lower than 102 equities recorded in the previous week.

Top 10 gainers W/W

  • WAPIC INSURANCE PLC up 12.12% to close at N0.37
  • LEARN AFRICA PLC up 9.62% to close at N1.14
  • UNITY BANK PLC up 9.62% to close at N0.57
  • NEIMETH INTERNATIONAL PHARMACEUTICALS PLC up 9.55% to close at N1.95
  • IKEJA HOTEL PLC up 9.52% to close at N0.92
  • CAP PLC up 8.57% to close at N17.10
  • BERGER PAINTS PLC up 7.44% to close at N6.50
  • UNION BANK NIG.PLC up 7.00% to close at N5.35
  • CONSOLIDATED HALLMARK INSURANCE PLC up 6.90% to close at N0.31
  • PRESTIGE ASSURANCE PLC up 5.77% to close at N0.55

Top 10 losers W/W

  • ASSOCIATED BUS COMPANY PLC down 16.67% to close at N0.30
  • NEM INSURANCE PLC down 9.78% to close at N2.03
  • TRIPPLE GEE AND COMPANY PLC down 9.09% to close at N0.40
  • UNIVERSITY PRESS PLC down 7.65% to close at N1.57
  • UNION DIAGNOSTIC & CLINICAL SERVICES PLC down 7.41 to close at N0.25
  • FCMB GROUP PLC down 6.36% to close at N2.06
  • CORNERSTONE INSURANCE PLC down 6.15% to close at N0.61
  • NIGERIAN AVIATION HANDLING COMPANY PLC down 6.10% to close at N2.00
  • NPF MICROFINANCE BANK PLC down 5.80% to close at N1.30
  • INTERNATIONAL BREWERIES PLC. down 5.71% to close at N3.30

Outlook

The Nigerian bourse ended the week cumulatively on a less impressive note, amid Brent crude prices closing above $43/Barrel.

  • It should be noted that prevailing macros, like the exponential growth in the COVID-19 caseloads across the world, dampened the resolve of foreign investors in taking a significant part in Nigeria’s stock market trading session, coupled with the prevalence of the dollar scarcity.
  • Buying pressure from notable financial brands, which include Union Bank, Unity Bank WAPIC, got neutralized by sell-offs recorded in FCMB, NEM, and International Breweries.
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COMMODITIES

Oil prices drop, currently on anemic demand

OPEC Secretary-General Mohammed Barkindo admits fuel demand is looking “anemic.”

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Crude oil prices drifted lower at the last trading session for the week. The drop is coming amidst a spike in COVID-19 cases across emerged markets which continues to weigh down on oil traders, as it is believed that the virus has curbed demand in two of the world’s biggest crude oil consuming areas.

OPEC+ plans to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January, as OPEC Secretary-General Mohammed Barkindo admits that fuel demand is looking “anemic.”

Brent crude futures (LCOc1) lost about 0.9%, to trade at $42.73 a barrel at the time this report was drafted, while U.S. West Texas Intermediate (WTI) crude futures lost 0.9%, to trade at $40.58 a barrel.

However, with their prevailing price levels, both major crude oil benchmarks are heading for small gains this week.

A technical committee of the OPEC+ ended a meeting yesterday expressing their fears over rising oil supply, as reduced human mobility aimed at limiting the spread of COVID-19 has also curbed fuel usage.

What they are saying

Stephen Innes, Chief Global Market Strategist at Axi, in an explanatory note to our source, gave his outlook for the fragile oil market.

“There is a high probability of a supportive decision from the OPEC+ meeting at the end of November if the demand outlook remains cloudy, especially with COVID-19 spreading rampantly across Europe and with flashpoints igniting in other parts of the world.

“With COVID-19 fears ravishing the world, I am unsure if an OPEC extension of current quotas will still be considered the magic bullet for the oil price recovery.

“That said, a recovery in risk markets like stocks on ongoing stimulus deal might also echo in oil markets.”

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CURRENCIES

Exchange rate gains at NAFEX window as dollar supply improves significantly

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Forex turnover rose significantly by 464% as Nigeria’s exchange rate at the NAFEX window appreciated against the dollar to close at N385.67/$1 during intraday trading on Thursday, October 15.

Also, the naira remained stable against the dollar, closing at N462/$1 at the parallel market on Thursday, October 15, 2020 as BDC operators get another round of dollar supply from CBN

This is also despite the continuation of the protest against the special anti-robbery unit (SARS) by the Nigerian youth which has limited movement in major cities across the country especially Lagos.

Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N462/$1 on Thursday. This was the same rate that it exchanged for on Wednesday, October 14.

Current developments

  • The local currency has strengthened by about 7.8% within the last one week at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders.
  • The CBN has sold over $450 million to BDCs since they resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
  • However, the exchange rate against the dollar has failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.
  • BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.
  • We also noted that forex traders monitored during the previous week, appeared to hoard forex, as they anticipated further depreciation in the market.
  • There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure, and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N385.67/$1.

  • This represents a 16 kobo gain when compared with the N385.83/$1 that it exchanged for on Wednesday, October 14.
  • The opening indicative rate was N386.04 to a dollar on Wednesday. This represents a 34 kobo gain when compared to the N386.38 that was recorded on Tuesday.
  • The N392.78 to a dollar is the highest rate during intraday trading before closing at N385.67. It also sold for as low as N382/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased significantly by 464% on Thursday, October 15, 2020.

  • According to the data tracked  from FMDQ, forex turnover rose from $29.53 million on Wednesday, October 14, 2020, to $166.55 million on Thursday, October 15, 2020.
  • The CBN had in the past weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The huge increase in forex supply after yesterday’s drop reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
  • The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and shaky economy that has been hit by the coronavirus pandemic
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CURRENCIES

Naira falls again at black market as #EndSARS protest limits movement.

Naira depreciated marginally against the dollar, closing at N462/$1 at the parallel market on Wednesday.

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Forex turnover declined by 63% as Nigeria’s exchange rate at the NAFEX window depreciated against the dollar to close at N385.83/$1 during intraday trading on Wednesday, October 14.

Also, the naira depreciated marginally against the dollar, closing at N462/$1 at the parallel market on Wednesday, October 14, 2020.

Nigerian Youth has been protesting demanding an end to SARS, the special anti-robbery unit of the Nigerian Police. Protest has limited movement in major cities across the country.

Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira depreciated against the dollar to close at N462/$1 on Wednesday. This represents a N1 drop when compared with the N461 that it exchanged for on Tuesday, October 13.

Current developments

  • The local currency has strengthened by about 7.8% within the last one week at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders.
  • The CBN has sold over $450 million to BDCs since they resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
  • However, the exchange rate against the dollar has failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.
  • BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.
  • We also noted that forex traders monitored during the previous week, appeared to hoard forex, as they anticipated further depreciation in the market.
  • There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure, and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira remains stable against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N385.83/$1.

  • This represents a 17 kobo gain when compared with the N386/$1 that it exchanged for on Tuesday, October 13.
  • The opening indicative rate was N386.04 to a dollar on Wednesday. This represents a 34 kobo gain when compared to the N386.38 that was recorded on Tuesday.
  • The N386 to a dollar is the highest rate during intraday trading. It also sold for as low as N380/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window declined further by 62.9% on Wednesday, October 14, 2020.

  • According to the data tracked  from FMDQ, forex turnover dropped from $79.53 million on Tuesday, October 13, 2020, to $29.53 million on Wednesday, October 14, 2020.
  • The CBN had in the past few weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The drop in forex supply reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
  • The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and shaky economy that has been hit by the coronavirus pandemic
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