Nigeria Newspapers Online

Nigerian stock market recorded a marginal decline of 0.15%. This downturn resulted in investors losing approximately 83 billion naira from their portfolios, bringing the All-Share Index (ASI) to 96,433.53 points and the market capitalization to 55.394 trillion naira. During this pe­riod, a total of 2.141 billion shares were traded, valued at 51.22 billion naira across 55,603 individual transac­tions. Despite the overall market decline, the Oil and Gas sector distinguished itself as the strongest per­former for the week, achieving a week-to-date return of 1.52%. This sector’s performance contrasts sharply with the Insurance sector, which experienced the most significant decline of 4.45% during the same period. Over the quarter, the market has faced a downturn with a negative return of 3.62%, while year-to-date returns have been more favorable, standing at 28.97%.

Among the top gainers for the week was Industri­al and Medical Gases Nigeria Plc, which saw a re­markable increase of 32.58%, closing at N35.00. Other notable gainers included Berger Paints, which rose by 31.12% to close at N18.75, and E-Transact, which gained 20.59% to end at N6.15. UACN Plc also saw a significant rise of 19.77%, closing at N20.90, while C&I Leasing increased by 18.57%, ending at N4.15. Conversely, the major decliners included Rtbriscoe, which had been experiencing a bullish trend in August but fell by 27.61%, closing at N2.57. Other significant losers were FTN Cocoa, which decreased by 18.38% to close at N1.51, Omatek Ventures, down by 18.18% to N0.72, The Initiates, which lost 13.18% to end at N1.91, and Cornerstones, which dropped by 12.59% to close at N2.36.

The performance of Nigeria’s equities market re­flects broader global market trends. During the same period, international stock markets also experienced declines. For instance, Nvidia, a prominent technolo­gy company, saw a substantial drop in its market capi­talization, which is now valued at $2.522 trillion. Nvid­ia’s stock price has fallen to $102.49, reflecting broader challenges in the tech sector.The MSCI All-Country World Index, which provides a comprehensive view of global stock performance, fell by 1.33%, closing at 801.88. Over the week, the index experienced a signif­icant decline of 3.9%, marking its deepest drop since the week beginning July 29. In the United States, ma­jor indices also reported negative performance: the Dow Jones Industrial Average decreased by 1.01%, closing at 40,345.41; the S&P 500 fell by 1.73%, ending at 5,408.42; and the Nasdaq Composite experienced a 2.55% drop, closing at 16,690.83. In Europe, the STOXX 600 index closed down by 1.1%, reflecting broader market weaknesses. Additionally, Germany’s DAX index saw a decline of 1.5% following reports that the country’s industrial production had fallen by 2.4% in July. This decline in industrial production highlights the ongoing economic challenges faced by major Eu­ropean economies.

In the forex market, the naira showed a signif­icant rebound, closing at N1,593.32 per dollar. This represents a 2.89% recovery after three consecutive days of depreciation. The rebound reflects the Central Bank of Nigeria’s (CBN) recent intervention strat­egies aimed at stabilizing the naira and improving market liquidity.

In response to pressures in the forex market, the Central Bank of Nigeria (CBN) has implemented a new policy aimed at improving forex liquidity. The CBN has authorized the sale of $20,000 each to Bureau De Change (BDC) operators at a fixed rate of N1,580 per dollar. BDCs are instructed to sell to eligible users with a margin no greater than 1% above this purchase rate. This measure is designed to stabilize the naira, control import costs, and ensure that end-users ben­efit from reduced transaction costs. By enhancing forex liquidity and stabilizing the currency, the CBN aims to boost investor confidence and attract foreign investment, contributing to overall economic stability.

In the fixed income sector, there has been a notable decline in yields across various tenors. Specifically, yields on 91-day, 182-day, and 364-day instruments fell by 1.2%, 1.7%, and 1.96%, respectively. This downward trend in yields indicates that investors might be seek­ing alternatives to fixed income securities, potentially due to concerns about debt sustainability and the at­tractiveness of other investment opportunities.

Additionally, FBN Holdings Plc has announced a significant strategic move by deciding to sell its entire stake in FBNQuest Merchant Bank Limited to Ever­Quest Acquisition LLP. This divestment is part of a broader strategy to optimize the company’s portfolio and could have notable implications for the financial sector.

NGXASI Weekly Chart

Looking ahead, the Nigerian equities market is ap­proaching a crucial technical level: the 8-day moving average, also known as the T-line. A breakthrough above this resistance level could signal the onset of a bullish trend. The current market’s money flow index stands at 41.29, suggesting that there is a reasonable amount of capital invested in the market, with expec­tations for additional funds to flow in as yields in the fixed income sector decline. The Relative Strength Index (RSI) is at 50.5, indicating that the market is currently in a neutral zone, neither overbought nor oversold. This neutral RSI reading suggests that the market could move in either direction depending on future developments, including investor sentiment and macroeconomic factors.

In summary, while the Nigerian equities market mirrors some global trends, recent policy measures and market dynamics create a complex but potentially favorable environment for investors. The market’s technical indicators, combined with recent policy interventions, suggest that there may be opportuni­ties for growth if key resistance levels are surpassed. Stakeholders should remain informed about ongoing market developments and adjust their strategies ac­cordingly to navigate the evolving investment land­scape effectively.

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