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Markets

Bears sink claws into NSE Banking index

Sterling Bank topped the gainer in the NSE banking index, posting a profit of (+4.71%).

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Nigerian Breweries brings the Bears to party, Investors down N20.5 billion 

At the end of the trading session today, the NSE banking index posted a loss of (-0.84) which disrupted the bullish momentum (+0.94%) held in the previous trading session on Tuesday and put the index point at 369.67 from its previous 372.79 index points.

The NSE banking index started today’s trading session with a bearish momentum posting a loss at the end of the trading session. The market ended with 4 profits and 6 losses.

Sterling Bank topped the gainer in the NSE banking index, posting a profit of (+4.71%) which was in support of the previous day’s profit of (+1.80%) placing the price at N1.78 from N1.68. Jaiz Bank recovered from the previous day’s loss of (-1.56%) to post profit of (+3.17%) at the end of the trading session today. Jaiz Bank showed a positive momentum as profits pushed prices up from N0.63 to N0.65.

Fidelity Bank posted a profit of (+2.58%) as opposed to the previous day’s loss of (-2.92%) placing the price at N2.39 from N2.34. Ecobank reverted some of its (-4.72%) loss with slight gains of (+0.99%).

Wema Bank trended downwards with a loss of (-8.06 %) finally picking an aggressive bear after the stalemate held in the previous trading session to settle its price at N0. 60 from N0.62. Access bank also posted a loss of (-3.61%), supporting the previous loss of (-1.81%), putting the price at 7.95 from N8.15.

UBA reduced close to half of the previous day’s profit of (+4.5%), posting a loss of (-2.08%) held in today’s trading session to settle its price at N7.05 from 7.20. GTB also made a loss of (-0.45%), which cancelled out the previous profit of (+0.30%), putting the price at N32.85 from N33.00.

Union Bank posted a loss of (-1.89%) trending downwards from the previous trading session’s stalemate dropping the price from N5.30 to N5.20. Zenith Bank posted a loss of (-0.22) opposing the profit of (+2.49%) held the previous day putting the price at N22.50 from  N22.60.

Outlook

  • Market sentiment trends toward the bears as four companies in the NSE banking index made profit as opposed to six losses, at the end of the trading session.
  • Nairametrics counsels cautious buying amidst growing uncertainties in Nigeria.

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Ubah,Jeremiah ifeanyi is a PhD candidate of Economics in Covenant university. He has held positions as the financial manager in Opera and is also a research ambassador in M&S research Hub. Ifeanyi is currently the financial market analyst for Nairametrics. Follow Ifeanyi on Twitter @ubahjc

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Currencies

Exchange rate falls at NAFEX window as Bitcoin slumps 15%

Naira depreciated against the US dollar on Friday 16th April 2021 to close at N411 to a dollar as bitcoin slumps by 15%.

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Friday, 16th April 2021, the exchange rate between the naira and the US dollar closed at N411/$1 at the Investors and Exporters window, where forex is traded officially.

Naira depreciated against the US dollar on Friday 16th April 2021 to close at N411 to a dollar. This represents a 0.12% fall compared to N410.5/$1 recorded on Thursday, 15th April 2021.

The Naira, however, remained stable at the parallel market to close at N482/$1 on Friday, 16th April 2021. The naira maintained its rate at N482 to a dollar in the parallel market for the week.

Meanwhile, the world’s most popular digital asset, Bitcoin suffered its biggest daily intraday loss since February as it dipped about 15% on Saturday and over 6% in the early hours of Monday, 19th April 2021.

Trading at the official NAFEX window

The naira depreciated against the US Dollar at the Investors and Exporters window on Friday to close at N411/$1. This represents a 50 kobo decline when compared to N410.5/$1 recorded on Thursday, 15th April 2021.

  • The opening indicative rate closed at N410.13 to a dollar on Friday. This represents 37 kobo gain compared to N410.5/$1 recorded the previous day.
  • Also, an exchange rate of N437.62 to a dollar was the highest rate recorded during intra-day trading before it closed at N411/$1. It also sold for as low as N393/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dipped by 47% on Friday, 16th April 2021.
  • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover decreased from $116.16 million recorded on Thursday, April 15th, 2021, to $61.52 million on Friday.

Cryptocurrency watch

The world most popular cryptocurrency, Bitcoin, dipped by 6.1% in the early hours of Monday to trade at $56,377.84 after enduring a bigger loss on Saturday.

  • Bitcoin dropped as much as 15% on Saturday, its biggest intraday drop since February, just days after hitting record highs.
  • Bitcoin was also down by 6.1% on Monday morning as the total crypto market cap dropped to $2.01 trillion.
  • Reports suggested that the downturn was due to speculation that the US Treasury may take action against money laundering that is carried out using digital assets.
  • Ethereum also dipped by 3.33% on Monday morning to trade at $2,240.5.

Crude oil dips marginally

Oil prices dipped marginally on Sunday, 18th April 2021 to close at $66.77 per barrel, indicating a 0.25% decline when compared to $66.94 recorded on Saturday.

  • Oil prices have, however, recovered significantly in the past week compared to $63.2 recorded at the beginning of the previous week as oil demand begins to boost.
  • According to a report by Rystad Energy, global oil demand is projected to increase year-on-year by 6% in 2021, climbing to an average of 95.4 million barrels per day, compared to 89.6 million bpd in 2020.
  • it also projected that road fuel demand will rise by 9% in 2021, to 45.1 million barrel per day, from 41.3 million bpd recorded in the previous year.
  • Brent Crude closed at $66.77 (-0.25%), WTI Crude closed at $63.13 indicating 0.52% decline, Bonny Light, $65.25 (+0.37%), OPEC Basket (+1.72%) to close at $64.18 while Natural gas dipped by 0.83% to close at $2.68.

External reserve

Nigeria’s external reserve increased by 0.08% on Thursday, 15th April 2021 to stand at $35.23 billion.

  • This represents the 18th consecutive increase in Nigeria’s external reserve position having gained $804.77 million since 18th March 2021, about a month ago.
  • Nigeria’s external reserve has received a consistent boost in recent times, owing to the growth in the price of crude oil and its policy to pay Nigerians for any unit of dollar received from the diaspora.
  • Meanwhile, the country’s reserve position is set to receive a further boost as the Federal Government announced its plans to issue %500 million Eurobonds for 2021.

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Market Views

SEC ban on foreign stocks denies Nigerian investors of generational wealth

Amid the booming interest in America, the SEC has reminded participants and investors that only authorized securities can be sold to the Nigerian public.

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As Americans turn their attention to stock and cryptocurrency markets, trading platforms Robinhood and Coinbase took the top two slots in Apple’s App Store last week.

According to Sensor Tower, Robinhood took the top spot on Friday, followed by crypto trading platform, Coinbase. TikTok came in third place. The surge in popularity coincides with Coinbase’s Nasdaq debut on Wednesday when bitcoin surpassed $64,000 for the first time.

The rise in popularity reflects an increase in retail trading during the pandemic, as well as a “meme stock” community centred on companies like GameStop. After a group of traders on Reddit deployed a short squeeze in January, the video game store became a household name.

This isn’t the first time Robinhood has topped the charts. The brokerage firm was the most successful app in the Apple and Google app stores in January, at the height of the GameStop controversy. Another trading app, Webull, came in second. The top ten also included Coinbase, Square’s Cash App, and Fidelity. During the height of the GameStop frenzy, Robinhood, which shut down the buy-side of those stocks, received backlash on social media, and its CEO was later called to testify in front of Congress.

Amid the booming interest in America, the Securities and Exchange Commission of Nigeria (SEC Nigeria) has exercised its legal authority and reminded participants and investors that only authorized securities can be sold to the Nigerian public. To put it another way, international stocks such as Tesla Inc., Apple, Amazon, Google, GameStop and others that are not currently listed in Nigerian jurisdiction should not be sold to Nigerian residents or businesses.

As a result of the new SEC directive, young Nigerians who have been using the new invest tech service providers to help diversify their portfolios face new challenges especially with the CBN ban on crypto transactions.

This creates a sizable problem particularly for traders that would at least want to earn above the 18% inflation rate.

What this means:

  • Retail investors are paying more attention to financial applications as they have witnessed massive gain in assets like crypto and meme stock.
  • Nigerians may find it difficult to benefit from international retail platforms with the SEC announcement.
  • SEC regulation may hamper the fundamental ideology for globalization especially from a finance perspective.

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