For the week ending August 11, the foreign exchange (FX) spot and derivatives markets reported a turnover of $390.60 million, a reduction of 14.18% ($64.52 million) from the $455.12 million realized the week before.
FMDQ Securities Exchange reports that despite a 1070.59% ($9.10 million) gain in FX futures turnover, the week-over-week (WoW) decline in turnover was primarily caused by a 16.21% ($73.62 million) decline in Forex spot turnover.
The exchange argued that despite a persistent lack of activity in both the Exchange Traded Forex Futures and Naira-Settled OTC FX Futures markets, the WoW increase in FX derivatives turnover was primarily driven by the 1070.59% ($9.1 million) increase in FX forwards turnover.
Furthermore, FMDQ noted that the overall value of transactions in the Forex Spot market decreased by 16.21% ($73.62 million) from the value of transactions performed in the week ending August 4, 2023, which was ($454.27 million), to stand at $380.65 million.
In the current Naira-Settled OTC Forex Futures market and Exchange-Traded Forex Futures, it was reported that no trades were executed throughout the course of the previous week.
Additionally, the average Nigerian Autonomous Foreign Fixing (NAFEX) rate was $/770.75, down from $/768.77 in the week ended August 4, 2023, signifying a 0.26 percent ($1.98) devaluation of the naira against the dollar.
The Nigerian Exchange Limited (NGX) reported a turnover of 1.74 billion shares valued at N25.1 billion in 30,652 deals, down from 2.56 billion units worth N29.6 billion exchanged in 37,713 deals the week prior.
According to volume, the financial services sector dominated the activity index with 1,24 billion shares worth N12.6 billion moved in 13,398 deals.
The industry made up 71.4% of the entire amount of equity turnover. The conglomerates industry came in second with 1,572 deals totaling 133 million units at a cost of N575.7 million. With a turnover of 87.6 million shares worth N2.3 billion in 2,404 deals, the ICT sector came in third.
518.847 million shares worth N3.9 billion were traded in 1,901 transactions in the top three stocks, Sterling Financial Holdings Company Plc, FBN Holdings Plc, and Universal Insurance Plc, accounting for 29.8% of the total equity turnover.
On the price movement chart, last week’s transactions were boosted by investor interest in MTNN (+1.1%) and a few Tier-one banking stocks. As a result, the NGX All-share index and market capitalization increased by 0.2% and 0.262%, respectively, to close the week at 65,325.37 and N35.572 trillion.
Similarly, all other indices finished higher except NGX Main Board, NGX AFR. Div. Yield, NGX MERI Growth, NGX Consumer Goods, NGX Oil and Gas, NGX Lotus II, and NGX Industrial Goods indices which depreciated by 0.1 per cent, 1.6 per cent, 0.4 per cent, 0.92 per cent, 0.32 per cent, 0.09 per cent, and 0.39 per cent respectively while the NGX ASeM index closed flat.
As a result, the returns for the month and year as of today were somewhat higher at +1.5% and +27.5%, respectively.
Ambrose Omordion, the Chief Research Officer of Investdata Consulting Limited, commented on market performance as follows: “We expect mixed sentiments on bargain hunting, amid expected positive news and corporate earnings ahead July inflation data and first-tier banks earnings reports.”
“Pullbacks are creating buying opportunities, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.”
“Discerning investors have continued to target dividend-paying stocks to protect their portfolios.”
Cordros Capital stated that: “We expect market performance to remain mixed in the week ahead as investors rebalance their portfolios based on an assessment of corporate earnings released thus far for H1, 2023.”
“Nevertheless, we expect earnings from the Tier-1 banks in the coming week(s) to spur positive market sentiments, especially given the anticipation of interim dividends.”
“Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” he stated.
Vetiva Dealings and Brokerage also added: “Sectors traded mixed this week, with just the banking and insurance indices closing the week in the green. We expect similar mixed sessions next week.”
Further analysis of the transactions from the previous week revealed that a total of 70,841 units worth N2.863 million were exchanged this week in 85 deals as opposed to 27,073 units worth N1.335 million that were traded the week before in 90 deals.
In addition, 133,413 units worth N142.419 million were swapped this week in 38 deals as opposed to 143,414 units worth N146.16 million that were exchanged in 26 deals.
The week’s increase in 41 stocks was less than the week’s increase in 42 stocks. Compared to the previous week, 44 stocks declined less than 52 did, while 70 stocks were unchanged, up from the 62 that were registered.
