•Naira closes week at N1,488/$1
The Nigerian capital market saw a mixed week of trading, with equities taking a slight hit while other asset classes, like fixed income, gained ground.
On the close of trading on Friday, the Nigerian Exchange (NGX) experienced a minor slip, with the All-Share Index (ASI) dipping by 0.29% to close the week at 141,845.35 points. This modest downturn was primarily driven by profit-taking in some blue-chip stocks.
Despite this, the overall market sentiment wasn’t entirely negative. Exchange Traded Products (ETPs) and fixed income securities recorded gains, suggesting a shift in investor strategy.
This trend indicates that capital market participants are exercising caution and diversifying their portfolios into less volatile assets to hedge against market uncertainty. As we head into the new week, market observers anticipate a “mixed performance” as investors weigh macroeconomic factors and company performance before committing to new positions.
In the currency market, the Naira had a strong week, demonstrating a significant rebound against the dollar in both the official and parallel markets.
According to data from the Central Bank of Nigeria (CBN), the official exchange rate closed the week at N1,488/$1, a notable improvement from last Friday’s close of N1,503.5/$1. The currency even hit a five-month high of N1,497.5/$1 earlier in the week, fueled by improved foreign exchange liquidity and reduced demand pressure.
The positive momentum wasn’t limited to the official window. The parallel market also saw the Naira appreciate, closing the week at N1,520/$1, a significant gain from the N1,530.5/$1 recorded on Thursday. This narrowing of the gap between the two markets is a positive sign for currency stability and trader confidence.
Further bolstering this optimism is the country’s rising foreign exchange reserves, which increased to $41.9 billion from last week’s $41.6 billion. The increase in reserves is a crucial indicator of the nation’s economic stability, currency strength, and ability to manage debt, all of which are key factors for capital market investors.