Monday, September 12, 2022: The naira has been under severe pressure for more than a week now, breaking into the N700/$1 threshold in the parallel (black) market and widening the exchange rate premium in the Nigerian foreign exchange market. The naira has been hovering around a weak position with the dollar, as a constant decline in its value offset any appreciation previously gained.
Trading activities at the parallel (black) market show that the naira depreciated 0.7 percent against the dollar week-on-week as it closed at about N705/$1. For this review period, it depreciated 0.2 at the beginning of the day’s trading before settling at N705. Similarly, trading activities in the B2B market show that the naira lost 0.7 percent of its value when compared to the same period last week and closed at N708/$1. This is based on the information obtained from forex marketers in Lagos.
Investors and Exporters’ Window
The exchange rate at the Nigerian Investors and Exporters (I&E) FX Window maintains a record-low position with the dollar. As of the beginning of the day’s trading, the naira exchanged for N434.40 with a dollar. As trading progressed, it dropped to 436.50, losing 0.5 percent to the greenback.
An exchange rate of N437/$ was the highest rate recorded during the intra-day trading before it settled at N436.50/$1 at the end of the trading session, while it also traded as low as 425/$ during intra-day trading. According to data from FMDQ, a total of $99.78 million was traded at the Investors and Exporters (I&E) Window on Tuesday, representing a 51 percent increase from the $66.02 million traded the previous day.
Nigeria’s foreign reserve which has been on a downturn since the beginning of this month has increased slightly. According to data from the Central Bank of Nigeria (CBN), the gross foreign reserve increased to $38.9157 billion as of September 8, 2022, increasing by $34.8 thousand (0.000089 percent) from $38.9156 billion recorded on September 7, 2022.
Capital Market Update
As of September 12, 2022, the Nigerian equities market closed the trading session with the NGX All Share Index (ASI) decreasing by 14 basis points (bps) to close at 49625.71. The trading volume was 53,938,126 units, increasing by 1713 percent from 2,974,992 units recorded at the end of the previous day’s trading. The total value that exchanged hands was N336,905,168.98, representing a 2316 percent increase from the value (N13,943,122.74) at the close of trading the previous week.
There was a mixed performance for the sectors under our purview. The Insurance Pension and Banking sectors recorded a negative performance as their indices closed red, The Oil and Gas sector stabilized, while that of Consumer Goods closed green. The Insurance index decreased by 141bps, Pension by 53bps, Banking by 45bps, Oil and Gas remained unchanged, while the Consumer Goods index increased by only 2bps.
MULTIVERSE stock led the top gainers as the share price rose by 8.53 percent, while AIICO led the decliners after dropping by 7.02 percent. TRANSCORP emerged as the most traded stock by volume as 14,453,343 units of its stock were traded at N15,092,990.15. On the other hand, ZENITHBANK was the most traded by value as N155,277,026.55 exchanged hands for 7,758,818.00 units of its shares.