Presco Plc, Cadbury Nigeria, UACN, Dangote Sugar refinery and Consolidated Hallmark Insurance led the Gainers’ Chart on the floor of the Nigerian Stock Exchange on Thursday.
The market closed in positive territory, having traded stocks worth N3.07 billion leaving the All-share index at 26,569.80 index points. This change indicates 0.51% increase compared with Wednesday’s deals.
Also, the equity market capitalisation closed at N12.82 trillion.
Presco gained 9.51% on the Stock Exchange to close at N41.45. Cadbury Nigeria Plc followed with 9.39% gain to close at N9.90 as UACN also gained 6.02% to close at N8.8. Dangote Sugar Plc and Consolidated Hallmark rounded off the list with 5.96% and 5.41% gain to close at N16 and N0.39 respectively.
Neimeth Pharmaceuticals dipped 9.59% to close at N0.66 followed by Cutix plc, which lost 9.4% to close at N1.35. Chams plc lost 8.82% to close at N0.31. Royal exchange plc shed 6.9% of its share value to close at N0.27 while Union bank lost 4.55% to close at N6.3.
Top trades by volume
Union diagnostics was the most actively traded stock on the bourse today as it traded 186.99 million shares valued at N41.14 million across 4 deals. Fidelity bank plc followed with trades in 19.75 million shares at N40.92 million across 67 deals.
Dangote Cement Plc traded 12.32 million shares valued at N1.73 billion across 59 deals. Zenith bank plc traded 10.85 million shares valued at N201.7 million across 223 deals while UBA rounded off the list with trades in 8.37 million shares valued at N57.35 million across 143 deals.
Two day old crypto, YAM’s market value drops from $60 million to $0 in 35mins
Given YAM’s governance module, this bug would render it impossible to reach quorum.
Two-day-old crypto asset, YAM has seen its market capitalization vanish in less than 60 minutes. This happened after developers of the once-promising defi project attempted to fix a bug in the code, but weren’t successful.
Data from BKCoincapital, a crypto hedge fund, revealed how YAM, a liquidity mining protocol which attracted >$400mm in just its first 2 days of trading, had a bug discovered in its code. The bug caused the unaudited defi platform’s Market Capitalization to go from $60 million to $0 in approx. 35 minutes.
YAM, a liquidity mining protocol which attracted >$400mm in just its first 2 days of trading, had a bug discovered in its code, which caused the unaudited DeFi platform’s Market Capitalization to go from $60mm to $0 in approx. 35 minutes. #cryptocurrencies #YAM #Bitcoin pic.twitter.com/qBf07IzgVe
— BKCoinCapital (@BKCoinCapital) August 13, 2020
YAM is an experimental protocol mashing up some of the most exciting innovations in programmable money and governance.
YAM project developers, discovered a bug in the YAM rebasing contract that would mint far more YAM than intended to sell to the Uniswap YAM/yCRV pool, sending a large amount of excess YAM to the protocol reserve. Given YAM’s governance module, this bug would render it impossible to reach quorum, meaning no governance action would be possible and funds in the treasury would be locked.
At its core, YAM is an elastic supply cryptocurrency, which expands and contracts supply in response to market conditions, initially targeting 1 USD per YAM.
Nigerian’s should expect “a significant devaluation” to N550/$1 – Goldman Sachs
Goldman Sachs believes Nigeria will devalue past N500 between 12-18 months.
A leading global investment banking firm, Goldman Sachs Group, this week, predicted that a significant devaluation of the naira is expected within the next 12 to 18 months.
The investment firm believes this will help bring about “the desired balance” required to stabilize the currency. This was contained in an exclusive Bloomberg Terminal report published on Bloomberg. However, Bloomberg cited the link in an article reviewing the state of Nigeria’s equities market.
According to Bloomberg, “Goldman Sachs Group Inc. this week said a significant devaluation of the naira is likely in 12 to 18 months to stabilize Nigeria’s external accounts. An exchange rate of 500-550 per dollar should bring about the desired balance…. compared with a current rate of about 407”. Bloomberg
Nigeria’s one year forward trades at N408.21/$1.
Nigeria’s Forex Challenges
Nairametrics reported during the week that the central bank had devalued the official exchange rate to N380/$1 from N360.1/$1. The adjustment occurred on Thursday, August 6th, 2020. The adjustment is thought to be a move towards unification of the multiple exchange rate windows
The CBN has adjusted the official exchange rate twice this year. The first one was from N307/$1 to N360/$1 and then just last week, from N360/$1 to N380/$1. At the NAFEX market were the exchange rate is determined by market forces, the exchange rate trades between N388-N390 though turnover remains thin. The SMIS window currently exchanges forex at N380.69/$1 and BDC segment N447/$1. The parallel market exchange rate has averaged N475/$1 more recently.
Last month, the Nairametrics tracker indicates only $937 million was exchanged in July at the NAFEX market compared to $875 million in June. Forex analysts suggest pent up demand for forex is between $1.5 billion to $5 billion some of which include dividends and investments waiting to be repatriated out of Nigeria. CBN Governor Godwin Emefiele has promised to meet this demand when economic activities pick up in the country.
What this means: According to Nairametrics Research Team, whilst Goldman Sachs projection is shared by some hawkish analysts a lot is still yet to be considered. A reopening of the economy and return to full economic activities could change the demand and supply dynamics.
The direction of the exchange rate will be determined by oil prices, growth in the global economy, and Nigeria’s forex policies. The last time, Nigeria wrestled back from an exchange rate above N500/$1 the CBN created the I&E window allowing foreign investors to trade forex freely. The CBN also offered high-interest rates for OMO bills allowing foreign investors to keep their forex within the country.
The exchange rate disparity is currently due to low forex supply at the BDC, SMIS, and NAFEX markets respectively. These scarcity is forex is caused in part by the Covid-19 pandemic which has kept foreign investment out of the country limiting the supply available to the government. If this situation improves, then we could see a convergence between the parallel market to the NAFEX market with the former strengthening towards the latter.
However, a further devaluation could occur if forex scarcity persists and corporates find it difficult to purchase forex at the NAFEX(I&E) window driving up demand at the black market.
Note: This article was updated to reflect new information.
STANBIC, NB, UNILEVER record gains, as investors gain N49.88 billion
The Nigerian Stock Exchange’s market capitalization presently stands at N13,165 trillion.
The Nigerian Stock Market closed on a positive note today, as the All Share Index gained by +0.38% to close at 25,236.97 basis points as against +1.04% appreciation recorded yesterday.
Its Year-to-Date (YTD) returns currently stands at -5.98%. The Nigerian Stock Exchange’s market capitalization presently stands at N13,165 trillion. Investors gained N49.88 billion today.
Market turnover closed positive as volume moved up by +25.97% as against -0.84% downtick recorded in the previous session. GUARANTY, ACCESS and ZENITHBANK were the most active to boost market turnover. ZENITHBANK and GUARANTY topped market value list
Market breadth closed negative as MANSARD led 15 Gainers, as against 18 Losers topped by IKEJAHOTEL.
- UNILEVER up 8.33% to close at N13
- NB up 5.88% to close at N36
- STANBIC up 2.42% to close at N33.8
- FLOURMILL up 2.32% to close at N19.85
- MTNN up 0.84% to close at N119.5
- IKEJAHOTEL down 9.90% to close at N0.91
- CHAMPION down 8.97% to close at N0.71
- UNITYBNK down 8.47% to close at N0.54
- NEIMETH down 5.00% to close at N1.9
- BUACEMENT down 0.26% to close at N38.6
The Nigerian bourse ended on a positive note on Thursday, in spite of relatively thin market liquidity. Nairametrics envisages cautious buying due to security challenges in major economic hubs around the northern part of Nigeria.