•Stock market investors gain N1.22trn
By Chinwendu Obienyi
Nigeria’s bonds priced in U.S dollar galloped to their summit so far this year, hitting a 5 month-high on resumption of activities this week.
The nation’s domestic bourse also followed suit, climbing to 3.99 per cent as market capitalisation grew N1.22 trillion to hit the N31 trillion mark.
This came amid the suspension of the Central Bank of Nigeria (CBN), Godwin Emefiele, at the weekend by President Bola Tinubu, at the weekend.
Analysts who spoke on the development, said Emefiele’s suspension was considered a departure from a raft of policies that have kept foreign investors away from Africa’s largest economy.
On resumption of activities on Monday, Nigeria’s international bonds jumped the most among emerging-market peers at the open, with its longest-dated dollar bonds rising to the highest since January. The notes maturing in 2051 rose nearly 3 cents on the dollar to 73.42, the biggest gain since April, as of 8:05 a.m. in London.
Due to the June 12 public holiday, Nigeria’s stock and fixed-income markets could not react to the development on Monday. However, strong buys in stocks and price appreciation in bellwethers pushed the market up in the green as AccessCorp (10 per cent), GTCO (10 per cent) and Zenith Bank (10 per cent) and 58 others recorded gains in Tuesday’s trading session.
This resulted in the All Share Index (ASI) rising by 3.99 per cent to close at 58,163.55 points from 55,930.97 points recorded at the close of last week’s trading session.
Similarly, investors gained N1.22 trillion as market capitalization closed at N31.670 trillion from an opening value of N30.454 trillion. Consequently, the market’s year-to-date (YTD) return stood at +13.49 per cent.
From a sectoral standpoint, the Banking (+8.76 per cent) index recorded the most significant gain, followed by the Insurance (+4.83 per cent), Consumer Goods (+3.63 per cent), Industrial Goods (+1.21 per cent) and Oil and Gas (+0.22 per cent).
Reacting to the development, analysts said that with the suspension of Emefiele as CBN Governor, the nation’s benchmark interest rates may rise as the nation’s assets look more attractive to investors while adding that the scrapping of a multiple exchange rate regime will likely lead to the devaluation of the Naira. “The market will receive the removal of Godwin as a positive development, as his unorthodox policies had become an impediment for Nigeria”, Ronak Gadhia, director of Sub-Saharan banks research at EFG Hermes, said via email.
“His removal should be viewed as positive and could lead to increased risk appetite for Nigerian bonds and equities. “A more normalised and conventional” policy “should result in higher interest rates in the short term as the CBN attempts to rein in on inflation”, Gadia added.
At the close of business yesterday, the volume of stocks traded stood at 1.186 billion shares valued at N19.225 billion which exchanged hands in 10,369 deals. AccessCorp lead 60 stocks on the gainers’ chart with 10 per cent to close at N14.30 per share, GTCO followed with 10 per cent to close at N30.80, LASACO increased by 10 per cent to close at N1.98, NASCON grew by 10 per cent to close at N17.05 while Zenith Bank garnered 10 per cent to close at N30.80.
On the other hand, Ellah Lakes led 12 others on the losers chart with 10 per cent to close at N3.60 per share. John Holt was next with 10 per cent to close at N1.26, TIP fell by 9.62 per cent to close at 0.47 kobo, Caverton dropped 4.62 per cent to close at N1.24 while Veritas Kapital lost 4.35 per cent to close at 0.22 per cent.
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