…As naira maintains biggest fall in February

By Peter Egwuatu, with agency reports

The postponed general elections may not have affected the Nigerian stock market significantly as it maintained the longest regaining streak as investors, last week, gained N240 billion in five days, just as the Naira suffered its biggest monthly fall in over five years this February, 2015 following the drop in global oil price.

Specifically, all the stock market performance indicators throughout last week went up, with the market capitalisation, which represents the total value of shares traded on the Nigerian Stock Exchange, NSE closed N10.044 trillion on Friday as against N9.804 trillion recorded the penultimate week. For two weeks running, investors had regained N840 billion as market capitalisation rose from N9.204 billion on February 13, 2015 to close at N10.044 billion last Friday.

Also, yesterday, equities trading on the floor of Nigerian Stock Exchange, NSE opened the week in the green zone though with a weak momentum, and the NSE All Share Index appreciated by 0.54 per cent to close at 30,267.18. points The key value drivers were the Banking stocks gaining 1.77 per cent and the Consumer Goods rising by 0.68 per cent. However, the Industrial stocks traded flat.

Operators stated that investors bought companies they deemed oversold last week following declines spurred by concern lower oil prices and elections.

They further noted that bargain hunters are taking advantage of the low price of a number of stocks. According to them “They have suffered far beyond what the fundamentals would suggest, largely on the back of oil and foreign investors coming out of the market ahead of the elections.”

The All share index, another significant performance indicators of the stock market last week increased by 1,798.67 points from 29,383.93 points penultimate Friday to close at 27,585.26 points last Friday.

Meanwhile, dealers in the money market have cited concerns over political uncertainty and the central bank’s ability to manage a currency hammered by weak oil prices as the major reasons for drop in naria.

The naira shed 8.3 percent to the dollar in February, dealers said, worse than a 6.9 percent fall in November after the Central Bank of Nigeria, CBN devalued the currency by 8 percent in order to save its foreign reserves. However, reserves have fallen steadily and were down 8.6 percent by February 26 from a month ago, to stand at $31.46 billion after central bank stepped up support for the currency.

The naira closed at 202 on the inter-bank market on Friday, a level it broadly traded at this week, dealers said. A sale was carried out on Friday just before the inter-bank market closed, at 198 naira for $82.9 million, Thomson Reuters data showed. Dealers attributed the trade to a dollar sale by the central bank. At its weakest, the naira was quoted at a record low of 206.60 to the dollar earlier this month, a decline of 20 percent since the start of November.