Equities market appreciates by 0.4% WoW
The domestic equities market ended the week on a positive note, gaining 0.4 per cent in its week-on-week (w/w) performance as investors digested inflation data and the Central Bank of Nigeria’s (CBN) monetary policy decision.
Notably, BUA Foods Plc gained 11.9 per cent and Dangote Sugar Plc advanced by 15 per cent to drive the Nigerian Exchange Limited All-Share Index (NGX ASI) higher by 0.4per cent w/w to 108,497.40 basis points,
The NGX ASI in its month-to-date and year-to-date returns increased to +3.8per cent and +5.4per cent, respectively.
However, trading activity remained subdued, as total volume and value declined by 16.2% w/w and 10.1per cent w/w, respectively.
Across sectors, the Consumer Goods (+6.5per cent) and Insurance (+1.5per cent) indices advanced, while the Banking (-3.2per cent) and Oil & Gas (-2.9per cent) indices declined. The Industrial Goods index closed flat.
According to analysts at Cordros Research, “Looking ahead, market performance is expected to be influenced by the upcoming economic growth report (Q4-24 GDP) and further corporate earnings releases, with Industrial Goods heavyweights Dangote Cement Plc, Lafarge Africa Plc, and BUA Cement Plc expected to release 2024 audited financials next week. In the medium term, we expect investor sentiments to be guided by macroeconomic trends and the movement of yields in the fixed income market.”
Meanwhile, the naira appreciated by 0.6per centt to N1,501.08/USD at the Nigerian Foreign Exchange Market (NFEM) as the CBN intervened, selling $66.80 million to authorized dealers.
Also, the FX reserves level declined by $300.11 million w/w to $38.74 billion (20 February), marking the 6th consecutive week of decline. In the forwards market, the naira rates increased across the 1-month (+0.8per cent to N1,541.90/dollar), 3-month (+1.2per cent to N1,614.50/dollar), 6-month (+2.0per cent to N1,715.15/dollar) and 1-year (+2.2per cent to N1,906.24/ dollar) contracts.
“In line with the CBN’s efforts to sustain carry trade opportunities and boost capital inflows, coupled with its ongoing market interventions, we expect FX liquidity to remain adequate, supporting naira stability in the short term,” analysts at Cordros Research added.
