The Nigerian Exchange (NGX) saw a soft rally in its intraday trading session, with AIICO Insurance and PZ Cussons emerging as top gainers. The market’s positive movement was primarily driven by bargain hunting in key banking stocks, including UBA and Zenith Bank. The NGX All Share Index (ASI) witnessed a gain of 0.12%, indicating a bullish sentiment among investors.
The market’s recent fluctuations have presented an opportunity for investors to rotate positions and seek out stocks that are in oversold territory, signaling potential for a rally. This sentiment was evident in the performance of several banking stocks, with Zenith Bank seeing a slight climb and UBA remaining in the green. Fidelity Bank also showed an upward trend after experiencing a loss the previous day.
Naira Appreciates as Foreign Reserves Climb
The Nigerian local currency, the naira, appreciated at the official window, settling at N1,506 per dollar. This appreciation from N1,514.8671 the previous week was attributed to sufficient US dollar liquidity in the currency market, with total foreign exchange (FX) inflows reaching US$567.2 million. Foreign Portfolio Investments (FPIs) contributed the highest inflows, making up 32.5% of the total.
The nation’s gross external reserves also saw a significant climb, reaching $41.499 billion. This was supported by sustained inflows from various foreign sources, including hydrocarbon revenue, despite volatility in global commodity markets.
Crude Oil Prices Decline Amid Volatility
The report also noted a decline in Brent crude prices, which ended the previous week down 3.85% at US$65.5 per barrel. The initial price strength, driven by supply concerns related to potential U.S. sanctions on Iran, lost momentum following a softer U.S. jobs report and an unexpected build in U.S. crude inventories. Analysts anticipate continued volatility in crude prices, with the market’s direction depending on the balance between demand signals and producer supply decisions.
