Nigerian stocks fell to a four and half months low yesterday, undermined by heavyweight cement and energy firms, while the naira firmed on the parallel market on weak demand. The local bourse index declined 2.59 per cent to 29,909 points, its lowest since March 25, with Dangote Cement, which accounts for a third of market capitalisation, and energy firm Seplat fell 5 per cent apiece to N171.48 and N270.75 each. According to Reuters News, Nigeria’s stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, fell for the sixth consecutive day, as investors switched funds to shorter-dated money market instruments with higher yields.
Four Mills of Nigeria shed 4.96 per cent to N26.63, Nigerian unit of South Africa’s Standard Bank Stanbic IBTC fell 4.98 per cent to N18.88 and beverage maker Cadbury was down 4.98 per cent to N31.64. On the foreign exchange market, the naira traded at N217 to the dollar in the parallel market, better than the 221 it closed last Friday amid improved dollar liquidity, as Central Bank of Nigeria (CBN) sustained its dollar sales in the market, traders said.
“The market has started feeling the effect of the dollar sales by the central bank in the last two weeks and tight measures introduced to prevent cross boarder currency trafficking,” Aminu Gwadabe, President of Nigeria’s bureaux de change association, told Reuters.
The apex bank increased the frequency of dollar sales to the bureau de change operators two weeks ago to twice-weekly from the usual once a week previously in a move meant to increase liquidity in the market and support the local currency.
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