Stocks, naira likely to re­bounce af­ter CBN FX in­ter­ven­tions

Daily Trust - - BUSINESS - By Hamisu Muham­mad & Sun­day Michael Ogwu, La­gos

Stock mar­ket in­dices may likely re­bounce back as in­vestors are hope­ful that the in­ter­ven­tion of about $700 dol­lars last week by the Cen­tral Bank at the in­ter­bank mar­ket will ease the forex scarcity in the mar­ket seg­ment.

The CBN also on Fri­day opened spe­cial win­dow for the Bureau de Change op­er­a­tors by al­low­ing them to buy forex from the in­ter­na­tional money trans­fers op­er­a­tors.

Forex scarcity had forced the overnight lend­ing rate to jump al­most 40 per cent from 18 per cent last week which forced the naira to N330/$ as at Fri­day. The pres­sure also saw the naira de­pre­ci­ate to N378 to a dol­lar on the par­al­lel mar­ket.

With the two in­ter­ven­tions and the Mon­e­tary Pol­icy Com­mit­tee meet­ing this week which may likely ac­cess the new flex­i­ble ex­change rate ini­tia­tive, the value of the lo­cal cur­rency may ap­pre­ci­ate.

Speak­ing to Daily Trust yesterday, act­ing pres­i­dent of the As­so­ci­a­tion of Bureau De Change op­er­a­tors, Aminu Gwad­abe, said the open­ing of the win­dow for the for­eign trans­fer sale to his mem­bers is a wel­come de­vel­op­ment and may likely in­ject liq­uid­ity in the mar­ket if well han­dled.

He said the con­tin­ued down­fall of the naira was due to the scarcity and that more and more peo­ple were now de­mand­ing for the forex be­cause there it is no longer safe to keep naira es­pe­cially for the in­tend­ing trav­ellers.

“We hope the banks will im­ple­ment the pol­icy, be­cause it’s not enough for the CBN to an­nounce it but to en­sure that the banks im­ple­ment it,” Gwad­abe said

Mean­while, the Nige­rian Stock Ex­change (NSE) ended last week on a neg­a­tive note as the all-share in­dex (ASI) and mar­ket cap­i­tal­i­sa­tion de­clined 3.98 per­cent for the fourth con­sec­u­tive week to close at 27,659.44 points and N9.500 tril­lion re­spec­tively.

“Sim­i­larly, all other in­dices fin­ished lower dur­ing the week, with the ex­cep­tion of the NSE Con­sumer Goods In­dex that gained 0.89 per­cent, while the NSE ASeM In­dex closed flat,” ac­cord­ing to the NSE’s weekly stock mar­ket re­port.

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