During the week, the Central Bank of Nigeria (CBN) in a press release, reaffirmed its dedication to enhancing liquidity in the Foreign Exchange (Forex) market. The banks six-point agenda includes promoting market-driven exchange rates, emphasizing reference to reliable platforms for rates, injecting liquidity into the Forex market when necessary, allowing importers of previously restricted items to purchase foreign exchange, clearing the existing Forex backlog and pursuing the goal of a unified Forex market through consultations with stakeholders. Furthermore, the National Bureau of Statistics (NBS) recently published its Capital Importation data for Q2:2023. On a year-on-year (YoY) basis, total capital imported dropped by 32.90% to settle at USD1.03bn in Q2:2023 (vs. USD1.16bn in) Q2:2022. This follows significant declines in two of its major components, Foreign Direct Investment (-41.54% YoY to USD86.03mn) and Foreign Portfolio Investment (-85.89% YoY to USD106.85). However, its third component, Other Investment (+32.73% YoY to USD837.34mn) increased in the period.
Equities and stock recommendation
This week, the Nigerian Equities market closed with positive sentiment as the market recorded gains in four (4) out of the five (5) trading sessions of the week. Consequently, the NGX ASI increased by 1.12% WoW to 67,200.69 points, while its year-to-date (YtD) returns settled at 31.12%, a surge from last week’s 29.66%. Notably, all sectors under our coverage garnered gains except for the Banking sector, which lost 78bps WoW. Specifically, the Industrial Goods (+5.03% WoW), Consumer Goods (+1.39% WoW), Oil and Gas (+0.33% WoW) and Insurance (+0.92% WoW) sectors closed positive. The top gainers for the week were ABCTRANS (+23.1% WoW to NGN0.80), CHIPLC (+12.7% WoW to NGN1.15) and BUACEMENT (+12.6% WoW to NGN105.80). On the flipside, PRESTIGE (-10.00% WoW to NGN0.45), ROYALEX (-9.6% WoW to NGN0.47) and PRESCO (-9.5% WoW to NGN182.00) topped the losers’ chart. We expect mixed sentiments in the coming week, as investors position themselves for dividends, pending the release of 9M:2023 earnings results.