The Nigerian stock market displayed a positive performance on a Week-on-Week, W/W basis, on the heels of the removal of foreign exchange , FX restrictions on 43 consumer goods by the Central Bank of Nigeria, CBN.
Meanwhile, investors’ eyes are still on the September Consumer Price Index, CPI, and third quarter 2023, Q3’23, corporate earnings reports, to determine next investment positions.
Analysts have opined that amid policy somersaults and the clear lack of proper preparation before any policy adjustment and pronouncements are made is dampening confidence and market momentum as to where the fiscal and monetary authorities are headed.
On Thursday, the CBN lifted the embargo it placed on 43 items disqualified from accessing forex from its official window before now, even while the problem of supply in the FX market and backlogs of unmet demands are yet to be addressed.
Meanwhile, analysis of trading last week showed that the Nigerian Exchange Limited, NGX, having gained in four out of five trading sessions, the All Share Index, ASI recorded a 1.12% WoW gain – the biggest weekly gain since the week ended 01 September, 2023.
As a result, the All Shares Index, ASI, Year-to-Date, YtD, return rose to 31.12%, and market capitalisation gained N409.91 billion WoW to settle at N36.92 trillion.
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Strong demand in Dangote Sugar gaining 4.66%, NASCON 4.96% and some Tier-1 banks namely Access Corporation 0.63% and UBA 0.29% gains sustained the market’s bull run.
Reacting to market performance, analysts at Cardinalstone Research stated: “We opine that the positive market sentiment may not be unconnected to the CBN circular lifting restrictions on the 43 earlier FX-restricted items and reiterating its commitment to improving FX liquidity.”
In their own comment, analysts at InvestData Consulting said: “We expect mixed sentiments to continue on Treasury Bill, TB, yields drop, CBN embargo lifting, bargain hunting and portfolio repositioning ahead of September CPI and Q3 corporate earnings reports in the face of sector rotation, with all eyes are on the fiscal and monetary authorities to give direction of the government reforms and policies so far.
”But pullbacks are creating ‘buy’ opportunities amidst the economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.
”We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios.”
However, analysts at Comercio Partners said, “We expect a calm start to the week”.
