The stock market increased by 5.5 percent last week as a result of the federal government’s launch of the Foreign Exchange market reform.
Vanguard reported that on Wednesday, June 15, 2023, the government announced steps to liberalize the foreign exchange market.
The initiatives included the abolition of all market segmentations and the elimination of numerous exchange rates.
Additionally, the reform gave banks the ability to trade foreign exchange, at any rate, using the willing buyer, willing seller framework.
Before the official announcement on Wednesday, rumors of the proposed revisions had sparked a bullish run in the market on Tuesday.
However, the market retreated on Friday as investors booked profits, resulting in a 0.33 percent loss.
Nevertheless, investors saw gains of N1.67 trillion as the market capitalization increased from N30.455 trillion at the start of the week to N32.126 trillion.
Additionally, the benchmark All Share Index increased by 5.5 percent to 59,000.96 points from 55,930.97 points at the start of the week.
As a result, the index’s month-to-date and year-to-date returns rose to +5.8% and +15.1%, respectively.
The banking sector led the pack with 12.6%, followed by the oil and gas (+11.9%), insurance (+9.0%), consumer goods (+4.1%), and industrial goods (+4.1%) sectors.
Trading volume and value increased by 94.7 percent and 35.3 percent, or 4.276 billion and N62.176 billion, respectively, in terms of activity levels.
The profit-taking that started on Friday, according to analysts at Cordros Capital, would continue into the following week. They predicted: “We expect profit-taking actions following the recent increase in the market.
However, “early bird” investors’ bargain-hunting activities in advance of the H1-23 earnings season is expected to mitigate this.
