Monday, July 18, 2022: The Nigerian Investors and Exporters (I&E) FX Window opened the trading session on a bullish note as the dollar sold for N428.26/$1 representing a 0.5 percent appreciation from the closing rate (N430.33/$1) at the end of trading activities on Friday of the previous week. However, as the intra-day trading progressed, the Naira slipped down to N429.12/$1, off-setting 0.2 percent out of the initial appreciation witnessed earlier at the beginning of trading activities on Monday morning.
An exchange rate of N444/$1 remained the highest rate recorded during the intra-day trading before it settled at N429.12/$1 at the end of the trading session, while it also traded as low as N414/$1 during intra-day trading. According to data from FMDQ, a total of $95.58 million was traded at the Investors and Exporters (I&E) Window for the reporting period. Represent an increase of 51.3 percent from the $63.19 million traded on Friday. This means that liquidity in the market is increased as more transactions were fulfilled in the official market.
In the parallel market, Naira closed against the dollar at N615/$1, declining by 0.16 percent compared to N614/$1 traded on Friday of the previous week. Trading activities at the B2B market show that the exchange rate closed at about N618/$1 for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
Nigeria’s gross external reserve has been crawling upward since July 2022. According to data from the Central Bank of Nigeria (CBN), as of July 14, Nigeria’s foreign reserve stands at $39.43 billion, improving slightly by $6.9 million (0.02 percent) from the 39.42 billion recorded as of July 13.
The rising crude oil prices have been the major driver of the external reserves with the CBN’s market intervention cushioning the supply shock of the greenback and helping to stabilize the naira. However, as shortages of dollars persist in the market, the value of the naira may drop further.
Capital Market Update
As of July 18, 2022, the Nigerian equities market closed the trading session on a bullish note as the NGX All Share Index (ASI) rose by 20 basis points (bps) to close at 52319.94. The trading volume was 1,002,793 units, dropping from 116,280,764 units traded on Friday of the previous week. While the total value that exchanged hands was N 27,296,391.26, declining by 99 percent from N3.46 billion.
Mixed performance was observed for the sectors under our review as the NGX indices for two sectors increased, while one remaining index declined. Oil and Gas and Pension performances were bullish as the two indices closed in green while Banking, Insurance, and Consumer Goods indices closed in red. The Oil and gas index, leading the gainers rose by 402 bps, Pension by 65 bps, on the other hand, the Banking index dropped by 4bps, Insurance by 53 bps while Consumer Goods, having the highest decline, dipped by 64 bps.
GLAXOSMITH led the top gainers having risen by 8 percent. UBA was the most traded stock by volume while ZENITHBANK was the most traded by value as of the end of the trading session for the reporting period.
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