- Oil prices rebound
The naira appreciated by N8 in the last one week at the parallel market and the equities market recorded major gains of N777.9 billion as oil prices picked up.
The All Share Index (ASI) grew by N778 billion to N14.9 trillion at the close of business on Friday as investors saw opportunities in crude oil upbeat and new push to stabilise the global oil market.
Brent rebounded to $43.21/barrel from previous week’s close of $40.65/barrel, despite rising COVID-19 cases.
The benchmark stock index, ASI, soared past 13 per cent in the past month, and is also the best-performing market in the world as at last Tuesday.
It is currently on the longest winning run since July 2017 as local and foreign investors continue to hunt for higher yields.
Speaking at the last Monetary Policy Committee meeting in Abuja, Central Bank of Nigeria (CBN) Governor Godwin Emefiele said as a lead indicator, the improvement in the equities market indices signposts the commencement of a broad-based economic recovery.
The naira and equities market rebound came after Organisation of the Petroleum Exporting Countries (OPEC) and its allies agreed to ensure that proactive and preemptive measures are taken to support the global oil market.
OPEC’s 2020 World Oil Outlook showed that the pandemic may prove the tipping point for peak oil demand.
It predicted that global oil demand will grow at relatively healthy rates during the first part of the forecast period before demand plateaus during the second half.
But the external reserves remained pressured as they decreased five basis points week-on-week to $35.7 billion on October 7, data from the Central Bank of Nigeria (CBN) showed.
At the official window, the CBN spot rate remained unchanged at N379 to a dollar while the parallel market rate strengthened by N8 week-on-week to N457 to a dollar.
The Nigerian Autonomous Foreign Exchange (NAFEX) rate depreciated by 83 kobo week-on-week at the Investors and Exporters (I&E) window to close at N385.83 to a dollar.
Report by Afrinvest West Africa said turnover at the I & E window slipped 36.4 per cent week-on-week to $329.2 million, from the $517.5 million recorded in the previous week.
The aggregate value of the open contracts at the FMDQ Securities Exchange FX Futures Contract segment improved by 0.6 per cent ($66.4 million) week-on-week and settled at $11.2 billion.
The oil prices recovery also triggered dominance of the bulls at the domestic equities market where the All Share Index rose by 5.6 per cent to 28,415.31 points; market capitalisation hit N14.9 trillion with N777.9 billion week-on-week gain; while year-to-date return settled at 5.9 per cent.
