Wednesday, August 3, 2022: The Nigerian Investors and Exporters (I&E) FX Window began the trading session on a positive note as the naira to dollar exchange rate stood at N427.90/$ implying an uptick of 0.6 percent from the closing price the previous trading day. But as the intra-day trading progressed, the naira declined against the dollar to exchange at N429.20/$ as of the close of trading activities, representing a 0.3 percent depreciation compared to the opening price. However, on a day-on-day basis, the naira gained 0.3 percent against the dollar.
An exchange rate of N444/$ was the highest rate recorded during the intra-day trading before it settled at N429.20/$ at the end of the trading session, while it also traded as low as 414/$ during intra-day trading. According to data from FMDQ, a total of $123.78 million was traded at the Investors and Exporters (I&E) Window for the reporting period, representing a decrease of 22 percent from the $158.68 million traded the previous day. The slight decrease in the value of the naira by the end of the trading session followed the 22 percent decline in dollar supply to the market.
In the parallel market, the naira continued to strengthen against the dollar. As of the close of trading yesterday, it appreciated to about N625/$ at the parallel (black market), gaining a whooping N40 against the dollar. On a week-on-week basis, the naira also rose by 0.7 percent from N675/$. Trading activities at the B2B market show that the exchange rate closed at about N632/$ for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
According to data from the Central Bank of Nigeria (CBN), the gross foreign reserve stands at $39.07 billion as of August 2, 2022, declining by $21.7 million (0.06 percent) from $30.09 billion recorded on August 1, 2022. The gross foreign reserve balance began a downturn this month and may offset the increase accrued in the previous month. This stresses the need for the CBN to increase non-oil earnings to improve the foreign reserve balance.
Capital Market Update
As of August 2, 2022, the Nigerian equities market closed the trading session with the NGX All Share Index (ASI) declining by 6 basis points (bps) to close at 50594.97. The trading volume was 24,689,354 units, decreasing by 81 percent from 129,166,039 units recorded at the end of the previous day of trading. The total value that exchanged hands was N296,530,928.28, representing an 89 percent decrease from the value (N2,861,547,115.76) at the close of the previous day of trading.
The indices for some sectors under our review increased while others recorded a different performance. Consumer Goods, Oil and Gas, and Pension performances were bullish as the three indices closed in green. On the other hand, the Insurance and Banking indices closed in red. The Consumer Goods index having the highest increase, rose by 39 basis points (bps), Oil and Gas by 28 bps, and Pension by just 5 bps. The Insurance index declined by 9 bps, while Banking had a downturn of just 32 bps.
HONYFLOUR stock led the top gainers as it rose by 9.64 percent, while CHAMPION led the top decliners after dropping by 10 percent. UACN emerged as the most traded stock by volume and also by value as 3,819,145 units of its stock were traded at a value of N42,010,605.45.