Nigerian Stocks Extend Rally as Naira Recovery Spurs ConfidenceNeo Khanyile
Nigerian stocks gained for a third day, extending their rally from a two-year low as a recovery in the naira boosts confidence in the nation’s banks.
The Nigerian Stock Exchange All-Share Index rose 2.7 percent to 29.209.19 by 1:42 p.m. in Lagos to the highest level since Feb. 10. Banks led the rally, with Guaranty Trust Bank Plc, the country’s biggest lender, advancing 10 percent and Zenith Bank Plc jumping 3.4 percent.
Stocks slumped on February 13 to the lowest level since December 2012, a day after the naira weakened to a record against the dollar, amid an escalation of violence by the Islamist group Boko Haram that prompted a delay in elections scheduled for this weekend. The decline in oil prices since June June has curbed government revenue and export earnings for Africa’s top crude producer.
“The decline in prices last week presented an opportunity for local investors,” Oluseye Feyisitan, a research analyst at Lagos-based Afrinvest West Africa Ltd., said by phone on Wednesday. “A lot of the blue-chip companies in the financial-services and industrial-goods sectors are trading at a discount.”
The naira gained 1.3 percent to 197 per dollar after the Central Bank of Nigeria introduced a new trading system to stabilize the currency. The naira has appreciated 4 percent since falling to a record on February 12.
Access Bank Plc climbed 6.1 percent, United Bank for Africa Plc gained 6 percent and FBN Holdings Plc added 5.4 percent. Transnational Corp. of Nigeria Plc, which has investments in energy, agriculture and hospitality, rose 7.8 percent.