Lagos- Some financial experts on Monday said that the economic measures announced by the Federal Government would douse speculation and guard against the exit of foreign investors from the nation’s bourse.
They told the News Agency of Nigeria (NAN)in Lagos that the measures would end the sell pressure caused by speculation on possible naira devaluation.
NAN reports that the Monitoring Policy Committee at its 98th meeting last week officially devalued the naira by eight per cent, from N155 to N168.
It also moved the benchmark interest rate called Monetary Policy Rate from 12 to 13 per cent and increased private sector Cash Reserve Ratio from 15 to 20 per cent.
The immediate-past President, Association of Stockbroking Houses of Nigeria (ASHON), Alhaji Rasheed Yussuf, said that the market might witness the entrance of new foreign and local investors.
Yussuf said the market was under intense sell pressure because of the exit of foreign investors, due to declining oil price.
He said that the measures announced by the Central Bank of Nigeria would renew investors’ confidence in the market, adding that the worst times for the market were over.
Yussuf said that the equity market would not witness a persistent major downturn in the near future, “unless the oil price falls below 60 dollars per barrel.”
He said that the market fundamental was strong, adding that stocks were down because of external factors.
The Managing Director, HJ Trust & Investment Ltd, Mr Harrison Owoh, told NAN that the devaluation of the naira would boost activities in the capital market.
Owoh said the policy would favour foreign investors because they would use fewer dollars to buy more stocks at the Nigerian stock market.
“The cost of shares will be cheaper for foreign investors now, unlike in the past,” Owoh said.
NAN reports that the Nigerian Stock Exchange (NSE’s) All-Share Index last week rose by 616.87 basis points or 1.81 per cent, to close at 34,543.05, compared with the 33,926.18 achieved in the previous week.
Also, the market capitalisation increased by N163 billion, to close at N11.404 trillion, as against the N11.241 trillion posted in the preceding week, due to price gains.
PZ Industries topped the gainers’ table in percentage terms, growing by 28.38 per cent or N6.30, to close at N28.50 per share.
Livestocks Feeds rose by 22.50 per cent or 45k, to close at N2.45, while Flour Mills advanced by 21.20 per cent or N8.80 kobo, to close at N50.31 per share.
On the other hand, International Breweries led the losers’ chart, dropping by 10.34 per cent or N3, to close at N36 per share.
Evans Medical followed with a loss of 9.55 per cent or 21k, to close at N1.99, while AIICO Insurance declined by 7.06 per cent or 21k, to close at 79k per share.
Also, a turnover of 2.09 billion shares worth N28.23 billion were traded by investors last week, in 22,865 deals.
This was against the 1.36 billion shares valued at N14.57 billion, exchanged in 20,844 deals, in the preceding week.
The financial services sector was the most-traded, accounting for 1.67 billion shares worth N15.93 billion, traded in 12,563 deals.
The consumer goods industry followed with a turnover of 111.63 million shares valued N6.34 billion, transacted in 4,082 deals.
The conglomerates industry came third with 80.12 million shares worth N389.57 million, in 1,229 deals. (NAN)
