Demand for foreign exchange continued it pressure on the Naira, pressuring decline of the currency in the parallel market on Thursday, the Nigerian equities sustained a three day consecutive decline yesterday.
The market measuring indices, NSE All Share-Index depreciated by -1.40 per cent to close at 24, 829.59 pts, while market capitalization closed lower at N8,59 trillion from N8.72 trillion which opened trading.
However, market activity declined as investors exchanged 186m units of shares in 2,899 deals worth N1.75 billion, representing a – 18 per cent and -27 per cent decrease in total volume and total value respectively.
The downward pressure on market performing indices was propelled by price loss by highly priced equities, Dangote Cement lost -419pts, which more than hedged gains of +50pts or 1.72 per cent by Nigerian Breweries and Guaranty Trust Bank that also gained +16pts .
As a result of the sell –off in Dangote Cement, the NSE Industrial index shed -2.51 per cent while all other major sectors closed positive .The Oil & Gas and Consumer Goods sectors gained +0.76 per cent and 0.71 per cent respectively, while the Banking sector inched up +0.11 per cent.
The price movement table showed that only nine equity gained as 13 others depreciated. Forte Oil emerged the market’s best performer with N2.35 or 5 per cent equity price growth to close higher at N49.36 per share, followed by Okomu Oil , AIICO and FCMB that gained 4.5 per cent,3.51 per cent and 2.56 per cent respectively,
Unity Bank led the declining stocks with -7.59 or N0.06 decline in price to close at N0.73 per share, followed by Dangote Cement dropped-4.99 per cent, , Dangote Sugar declined by-4.99 per cent, African Prudential Registers declined by-4.90 per cent while Paintcom equity depreciated by -4.62 per cent.
Analysts however pointed that the market to remain volatile in the near term, while making projections that there is the possibility of potential support to market performance from a policy shift in FX regime.
“As such, we advise investors to lengthen their horizon and gradually build position in quality names for a medium to long term horizon” Investment One Analysts said.
Meanwhile, Due to CBN’s continued intervention, the NGN closed flat at N305 levels against the USD at the interbank market. However, the naira gained +0.19% to N387 against the GBP and +0.18% to N331 against the EUR.
At the parallel market, the NGN depreciated against major currencies, shedding -0.70% to N458 against the USD, -0.90% to N540 against the GBP and -3.20% to N475 against the EUR .
Going forward, experts expressed believe that the downward pressure on the local currency may persist as FX sales by the Apex may not be adequate to meet demand.