•FX spot, derivatives markets reach $1.1 billion in one week

The oil and gas index led the gainers’ chart at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX) with 1.4 per cent, spurred by gains in Eterna (+18.4 per cent) and Conoil (+8.3 per cent).

Following, the AFR-ICT and Industrial goods indices rose marginally by 10 basis points and five basis points w/w respectively, buoyed by buying interests in Omatek (+9.2 per cent), Airtel Africa (+0.1 per cent), Cutix (+10.0 per cent) and WAPCO (+0.8 per cent).

However, the banking index topped the losers’ chart with 2.1 per cent loss following selloffs in Wema Bank (-5.7 per cent), Sterling (-5.2 per cent) and United Bank Africa (-4 per cent).

The insurance and consumer goods indices trailed with 0.4 per cent and 0.1 per cent. The losses were caused by price depreciation in Universal Insurance (-2.7 per cent), NEM (-2.4 per cent), Champion Breweries (-7 per cent) and International Breweries (-2.6 per cent).

On the price movement chart, the NGX recorded four consecutive sessions of the downturn, due to a lack of positive triggers to spur strong buying interest, causing sell pressures on GTCO (-3.9 per cent), TransNational Corporation of Nigeria (-1.0 per cent), Seplat (-1.7 per cent) and UBA (-4 per cent) caused the All-Share Index to depreciate by 0.4 per cent resulting in month-to-date and year-to-date returns of -0.3 per cent and +33.3 per cent, respectively.

Reacting to market performance, analysts at Cordros Capital said: “As the half-year earnings season approaches, we believe investors will look for signs of improvement following the broadly lacklustre Q1, 24 corporate earnings. Consequently, we expect mixed market performance in the coming week, with bargain-hunting balanced by intermittent profit-taking activities.”
Cowry Asset Management Limited said: “Looking ahead to the upcoming week, the market momentum is expected to continue with ongoing bargain hunting and portfolio adjustments in anticipation of the June Consumer Price Index and half-year corporate earnings reports.

“These upcoming economic indicators are likely to influence investor decisions and market trends in the face of weak sentiments. As the changing market structure and fundamentals persist, investors are advised to position themselves in stocks with sound fundamentals.”
Meanwhile, the total turnover in the FX spot and derivatives markets, for the week ending July 12, 2024, was $1.1 billion, representing an increase of 38.7 per cent ($308 million) from $795.5 million reported in the week ending on July 5.

According to FMDQ Securities Exchange, the week-on-week (WoW) increase in total turnover was primarily driven by the 39.5 per cent ($311.93 million) increase in FX spot turnover, which recorded a total value of $1,102.39 million, compared to $790.46 million recorded in the week ending on July 5, 2024, offsetting the 78.6 per cent ($3.93 million) decrease in FX derivatives turnover.

The exchange said the WoW decrease in FX derivatives turnover was solely driven by the 78.6 per cent ($3.93 million) decrease in FX forwards turnover, whilst there was a continued lack of activity in both the exchange-traded FX futures and cleared naira-settled non-deliverable forwards (Cleared USD/NGN NDFs) markets.

Also, within the period, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) was $/₦1,546.21, compared to $/₦1,515.53 recorded in the week ending on July 5.