The Nigerian stock market continues its upward trend with a positive response to the central bank’s market-determined forex prices.
All Share Index (ASI) rises by 3.13% to reach 59,985.1 points, indicating growing investor optimism.
The anticipated return of foreign portfolio investment into the equity market boosts investor confidence, following a decline to $56 million from previous highs of $2.3 billion in 2018 and $1.8 billion in 2019.
The Nigerian stock market continued its upward trajectory today, extending the gains recorded yesterday.
Investors remained optimistic as the market responded positively to the latest information confirming that the central bank has been instructed to buy and sell forex at market-determined prices.
This development has sparked renewed enthusiasm and confidence among market participants extending the stock market rally to two days after a slew of positive announcements by the Tinubu administration.
The benchmark All Share Index (ASI) experienced a further increase, gaining 3.13% or 1,816.45 points to reach 59,985.1 points. This significant rise in the ASI indicates the growing positive sentiment and investor optimism in the Nigerian market.
TinuBull rally continues
The market capitalization also continued to climb, rising by 3.26% to reach N32.7 trillion. This surge in market capitalization further demonstrates the increased value of listed companies on the Nigerian Stock Exchange.
In terms of trading activity, the number of deals executed today saw a notable increase of 15% compared to the previous trading period.
Additionally, the volume of trade rose by 9.28%, reflecting heightened market participation and increased liquidity.
More than 10 stocks experienced gains of approximately 10%, with Dangote Sugar leading the gainers’ chart.
The positive performance of these stocks indicates the bullish sentiment prevalent in the market and the increased demand for equities.
Investors are loving it
Investors are reacting favorably to the news of the central bank’s commitment to market-determined forex prices.
This policy shift is expected to enhance transparency and foster a more predictable foreign exchange market. It is anticipated that this move will attract foreign investors and stimulate economic growth.
Market analysts have also expressed optimism about the potential positive impact of this new forex policy.
They believe it will help stabilize the exchange rate, curb inflation, and create a more conducive environment for businesses to thrive.
The ongoing investigation and planned reforms in the financial sector, as well as the suspension of the CBN governor, Mr. Godwin Emefiele, remain topics of interest and may continue to influence market sentiment.
Investors expecting capital importation
Investors are increasingly positive about the prospects of Nigerian stocks due to the anticipated return of foreign portfolio investment into the equity market.
The decline in foreign portfolio investment, which dropped to $56 million, has been a cause for concern among market participants.
However, with the recent policy shift towards market-determined forex prices and the expected stability in the exchange rate, foreign investors are regaining confidence in the Nigerian market.
The previous highs of $2.3 billion in 2018 and $1.8 billion in 2019 serve as a reminder of the market’s potential when foreign investors have faith in its stability.
As the exchange rate becomes more predictable and market conditions improve, investors foresee a resurgence of foreign portfolio investment, which could provide a significant boost to the equity market and further contribute to its positive trajectory.
Download Nairametrics App for breaking news and market intelligence.