Thursday, July 28, 2022: The Nigerian Investors and Exporters (I&E) FX Window closed the trading session on a bullish note as the naira ticked up to exchange at N426.20/$1 representing a 0.4 percent appreciation from the opening rate 0f N428.10/$1 at the beginning of trading activities on Thursday. On a day-on-day basis, the naira also appreciated by 0.9 percent having risen from N430/$ recorded as of the end of trading the previous day.
An exchange rate of N444/$ remained the highest rate recorded during the intra-day trading before it settled at N426.20/$ at the end of the trading session, while it also traded as low as 413.9/$ during intra-day trading. According to data from FMDQ, a total of $129.13 million was traded at the Investors and Exporters (I&E) Window for the reporting period. Representing an increase of 15 percent from the $126,69 million traded on Wednesday. This means that the slight appreciation in the value of the naira at the official market was on the back of the increased liquidity in the market.
In the parallel market, the naira has been declining consistently. On a week-on-week basis, it lost about N69 (11 percent) of its value to crash to a record low of N710/$ as of the reporting period. Trading activities at the B2B market show that the exchange rate closed at about N715/$ for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
Nigeria’s gross external reserve which has been crawling upward since June 2022 took a downturn to stand at $39.24 billion as of July 27, 2022. Representing a $25.7 million (0.06 percent) decline from $39.27 billion recorded on 26 July 2022. This information is according to data from the Central Bank of Nigeria (CBN) on reserve movement.
The steady decline in the value of the naira emphasizes the need for the government to increase the foreign exchange earnings, particularly from non-oil sources, to support the demand for the greenback in the forex market and to reduce the pressure on the naira.
Capital Market Update
As of July 28, 2022, the Nigerian equities market closed the trading session on a bearish note as the NGX All Share Index (ASI) dropped by 104 basis points (bps) to close at 49667.14. The trading volume was 46,094,660 units and the total value that exchanged hands was N788,070,924.38.
The performance observed for most of the sectors under our review was poor as the NGX indices for four sectors declined, while one remaining index increased. Pension, Insurance, Banking, and Consumer Goods indices were bearish as the four indices closed in red, while the Oil and Gas index was bullish, having closed in green. The pension index declined by 258 basis points (bps), insurance by 319 bps, banking by 354 bps, and consumer goods, leading the decliners dropped by 377 bps. On the other hand, the oil and gas index rose by 59 bps.
ZENITHBANK stock led the top gainers having risen by 5.29 percent, while CHAMPION led the top decliners after dropping by 9.87 percent. Also, FLOURMILL was the most traded stock by volume as 18322150.00 units of its stock were traded at the value of 558825331.20 as of the end trading session for the reporting period.