In what may seem a mark of confidence in the country, following the successful conduct of last weekend’s general elections, basic indicators of the Nigerian Stock Exchange (NSE) again closed green on Tuesday, the last business day in the month of March.
Market capitalisation (which measures investors’ worth) rose by N223.618 billion to Tuesday, to close at N10.717 trillion, while the All-Share index recovered closed at 31,744.82 points, chalking 662.34 basis points or 2.13 per cent. This brought the two-day gain to N399.025 billion and the index by 1,181.89 points or 3.86 per cent so far for the week.
Capitalisation for the period therefore jumped by N672.978 billion or 6.69 per cent, just as the benchmark index rose by 1,641.01 points or 5.45 per cent.
Perhaps, following the certainty of readiness of the Federal Government to keep fate with the rescheduled elections, the market indicators had started a steady climb. In the past one week for example, the value of companies listed on the exchange recovered N743.37 billion, while the index improved by 1,854.98 points or 6.20 per cent between last Wednesday and Tuesday.
The biggest gainer for the month of March, according to the NSE, was oil marketing giant- Total with N39.99; ahead of Nestle’s N25.00 notch; while Mobil came a distant third with 995 kobo; and Guiness, 869 kobo. Unilver grabbed 799 kobo; Dangote Cement, 700 kobo; Conoil, 643 kobo and Nigerian Breweries, 370 kobo; among others.
Seplat Petroleum Development Company shed N72.00; UACN, 797 kobo; ahead of the 578 kobo loss by its subsidiary- Chemical and Allied Products. Presco lost 459 kobo; just as Beta Glass shed 451 kobo apiece.
Meanwhile, latest data by the Central Bank of Nigeria (CBN) on Tuesday indicated that the nation’s foreign exchange reserves fell by $1.559 billion or 4.97 per cent to $29.81 billion between February 27 and March 27.
The reserves fell $8.009 billion or 21.36 per cent year-on-year from $37.80 billion in the corresponding period of 2014.
The CBN said last Thursday that the nation’s external reserve dropped below $30 billion for the first time since 2006.
The nation’s external reserves has been on a decline for the past six months as the continuous decline in oil price has reduced the amount of foreign exchange accruable to the government.
This has worsened as the demand for dollars soared since December 2014.
The pressure on the reserves was worsening, despite the relentless defence of the Naira by the CBN since last year even when it was clear that the exchange rate was unsustainable at N155/ $1. This forced the apex bank to devalue the Naira for the second time within two months. By fourth quarter of last year, the US$ exchange for N199 each. At current level the reserve has hit its lowest point in the past 10 years.
CBN had attributed the pressure on the external sector to unscrupulous demand for foreign exchange and had subsequently scrapped its auction system early this month.
Rising from its two-day Monetary Policy Committee (MPC) meeting last week Tuesday, members (including very senior executives of the CBN, expressed concerns about the incidence “of currency substitution and partial dollarisation in the economy, a development which may have significantly fuelled the high demand for foreign exchange.”
According to the communiqué read by Godwin Emefiele at the end of the meeting, the MPC chairman and CBN Governor, the committee reminded all “that the naira remained the currency of transaction in the economy,” urging the CBN “to take all possible measures to address this development.”
Members of the committee, particularly “expressed concern about the wide divergence between the interbank and the bureau-de-change exchange rates, which provides an avenue for arbitrage and speculative activities in the market.”
It noted with concern “the outlook for growth, which had moderated partly due to the effects of low oil prices, naira exchange rate depreciation, and election related concerns.”
Source: Daily Independent