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Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day - Investment (3) - Nairaland

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Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by hamilton62(m): 2:21pm On Jul 09, 2015
jaybee3:


You want to tackle me?
Are you sure about that?

Think again and let me know your final answer

Here is a bonus for you to ponder on. We (CBN) have always pegged the Naira back using our foreign reserves. How would we be able to keep pegging it back if the reserve has dwindled and the price of crude has crashed ?
The Naira is always pegged at a certain price or greenback but the later readjustment (Devaluation of the Naira)was meant to protect the naira because of the rate of free fall it experience in the negative price spike and this devaluation is always backed with increase in export rate and industrialization reducing the import to adjust the Trade Balance of the country for a positive GDPA in interval...
The agricultural sector, SME and industrial sectors were at the best in the past administration and on revitalized state to encourage revenue generation of 60% non crude product and 40% crude products as to back the present greenback... continuity is only the solution..
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 2:23pm On Jul 09, 2015
Firefire:



You actually have a valid point, Nigerian Naira being manipulated since 1960. But which way forward ?

Way forward his re-invigorating the economy
Export our way outta trouble
That should bring about double digit growths
Demand for Naira will make it strong
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Firefire(m): 2:24pm On Jul 09, 2015
jaybee3:


Way forward his re-invigorating the economy
Export our way outta trouble
That should bring about double digit growths
Demand for Naira will make it strong


It is well...
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 2:25pm On Jul 09, 2015
hamilton62:

The Naira is always pegged at a certain price or greenback but the later readjustment (Devaluation of the Naira)was meant to protect the naira because of the rate of free fall it experience in the negative price spike and this devaluation is always backed with increase in export rate and industrialization reducing the import to adjust the Trade Balance of the country for a positive GDPA in interval...
The agricultural sector, SME and industrial sectors were at the best in the past administration and on revitalized state to encourage revenue generation of 60% non crude product and 40% crude products as to back the present greenback... continuity is only the solution..
What are you saying?

Devaluation is meant to maintain parity not protect

You still don't get it do you?
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Nobody: 2:35pm On Jul 09, 2015
atlwireles:
Naira is bound to hit N300 to a dollar this year in the Parallel market
then pounds will be??
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by hamilton62(m): 2:45pm On Jul 09, 2015
jaybee3:

What are you saying?

Devaluation is meant to maintain parity not protect

You still don't get it do you?
If devaluation is solely made for the PPP which was surely needed at that time what then is your take on the protection measure since devaluation does otherwise?
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by francizy(m): 2:51pm On Jul 09, 2015
Sai Buhari! angry



Or is it choi Buhari..



No kai Buhari preferably!


Shey the wailing wailers are wailing kwo..?


But am sure that some of the lying liars are now gnashing their teeth.. undecided
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 2:54pm On Jul 09, 2015
ddami:
then pounds will be??

IF:
£1 = $1.54
AND $1 = N300
THEN £1 = N462

angry angry angry angry
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Nobody: 2:59pm On Jul 09, 2015
jaybee3:


If £1 = $1.54
AND $1 = N300
£1 = N462

angry angry angry angry
huuh trouble... I believe the upcoming minister of finance will have a good economic reform... my only problem is for them not to sugar-coat things and make it look okay,,no matter how bad it gets, they should not do something that will make the naira look okay when its not...

1 Like

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by InvertedHammer: 3:01pm On Jul 09, 2015
/
It has nothing to do with naira.

Due to contagion effects of Greece, world equities have been selling off. Infact, Shanghai index lost 30% of its value in 2 weeks.
DJIA, NiKKEI, you name it, they all bled in the last one week. So Nigeria stock market followed suit. A rising wave takes all and vice versa.

That's all.


\

7 Likes 2 Shares

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 3:07pm On Jul 09, 2015
ddami:
huuh trouble... I believe the upcoming minister of finance will have a good economic reform... my only problem is for them not to sugar-coat things and make it look okay,,no matter how bad it gets, they should not do something that will make the naira look okay when its not...

Weak naira is actually good if we are an exporting Nation but very bad if we rely on imports

Why do you think the Chinese deliberately manipulate the Yuan. They do so to have an advantage since they are a manufacturing giant and other countries wouldn't be able to compete with them.

Same goes for the Yen that was massively re-engineered through consistent currency buyback

2 Likes 1 Share

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jcross19: 3:13pm On Jul 09, 2015
what do future hold for nigeria under new administration? God knows the best but the truth is that what are they doing to hold our economy if not soon mugabe will be laughing us.
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Nobody: 3:25pm On Jul 09, 2015
jaybee3:


Weak naira is actually good if we are an exporting Nation but very bad if we rely on imports

Why do you think the Chinese deliberately manipulate the Yuan. They do so to have an advantage since they are a manufacturing giant and other countries wouldn't be able to compete with them.

Same goes for the Yen that was massively re-engineered through consistent currency buyback
I think the govt is waiting for Jesus to come before they exploit our other mineral resources or they are saving it for the future generation but to me oil has been a RESOURCE CURSE to Nigeria,, even the tourism sector will bring in money,, but no all eyes on crude oil...
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 3:28pm On Jul 09, 2015
ddami:
I think the govt is waiting for Jesus to come before they exploit our other mineral resources or they are saving it for the future generation but to me oil has been a RESOURCE CURSE to Nigeria,, even the tourism sector will bring in money,, but no all eyes on crude oil...

It's an open secret that we have to diversify the economy.

No wonder PMB has been going on about tapping into our mineral resources

All is well

1 Like

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by 989900: 3:34pm On Jul 09, 2015
Excess liquidity (of which the FG,CBN, and the banks are culprits), importation of refined petroleum products, epileptic power supply, and currency racketeering, are key factors affecting the Naira.

Then you factor in our lack of exports bar crude oil, and a few other items, coupled with importation of hilarious items like palm oil, toothpick, and e.t.c.
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 3:35pm On Jul 09, 2015
jaybee3:


Gerrarohere pvnk

What has natural dynamics of economics got to do with voting pattern?

The Naira was first devalued during his reign
We started struggling with our ability to defend the Naira during his reign
Our economic outlook already pointed towards unstable during his reign

So why would any sane human continue on the same path hoping/praying for a change in fortune

Oya go get a cake or something and run along

You deserve more of the insult you gave that guy...

Uncertainty thanks to non-directional government of buhari fuels the fall more than any other factor...Stocks fell prior to election but picked up after election but went down again because there's no clearcut economic policy from bihari hence people are afraid of investing much fund...
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 3:40pm On Jul 09, 2015
Whynotthetruth:


You deserve more of the insult you gave that guy...

Uncertainty thanks to non-directional government of buhari fuels the fall more than any other factor...Stocks fell prior to election but picked up after election but went down again because there's no clearcut economic policy from bihari hence people are afraid of investing much fund...

We are talking about the Naira here dumbass

FX is not directly correlated with the Stock market

Come back next time so i can school you

2 Likes

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by ZeezaRapture(m): 3:53pm On Jul 09, 2015
I just want to write down something on this thread of Oga Seun smiley

hopefully, one day i will be FTC on his thread!
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by djon78(m): 3:57pm On Jul 09, 2015
jaybee3:


We are talking about the Naira here dumbass

FX is not directly correlated with the Stock market

Come back next time so i can school you

It may not be but policy of govt has a direct bearing on both. Fiscal policy and economic direction of the government in power determines the action of investors, whether to hold, buy or sell off.
And to be frank, this present administration should have hit the road immediately it commenced work, but it did not.
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 4:05pm On Jul 09, 2015
jaybee3:


We are talking about the Naira here dumbass

FX is not directly correlated with the Stock market

Come back next time so i can school you

According to the article;

[b]Investors had hoped for a sustained rally after smooth elections in March[\b] But markets have taken a hit from worries over the continued slide in the naira and the impact of persistently low oil prices on government finances.

What currency is Nigeria's economy denominated in?
Shares here are purchased in what currency?
Is this article or post about stock market or forex ?

You need to go back to school to learn before schooling me...start with learning the differences bro...

http://www.ibtimes.com.au/5-differences-between-forex-trading-stock-trading-1280435
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by CHANCEMAN: 4:09pm On Jul 09, 2015
jaybee3:

We are talking about the Naira here dumbass
FX is not directly correlated with the Stock market
Come back next time so i can school you

Is the stock market restricted to only investors in Nigeria?
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by djon78(m): 4:11pm On Jul 09, 2015
In addition Nigeria wasted a lot of time , infact decades concerning economy diversification. Succesive goverments were busy playing the ostrich by feeding fat on crude oil earnings, without thinking of what will become of the economy if no oil earnings. Now it is coming to haunt the nation. When there is no adequate preparation failure is unavoidable, and that is what Nigeria is facing.
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 4:13pm On Jul 09, 2015
Whynotthetruth:


According to the article;

[b]Investors had hoped for a sustained rally after smooth elections in March[\b] But markets have taken a hit from worries over the continued slide in the naira and the impact of persistently low oil prices on government finances.

What currency is Nigeria's economy denominated in?
Shares here are purchased in what currency?
Is this article or post about stock market or forex ?

You need to go back to school to learn before schooling me...start with learning the differences bro...

http://www.ibtimes.com.au/5-differences-between-forex-trading-stock-trading-1280435

Are you dense or just plain stupid?

So if stock A was selling for N20 per stock pre election but now selling at N15 per stock post election due to the uncertainties, don't you think the correction is producing a perfect avenue for re-entry into the market?

The value of Naira is still the same for Nigerians. It only becomes expensive when they have to rely on imports.

Has the price of food changed?
Has the living standard changed
Has Inflation changed for upward movement as a direct result of the devaluation?

I'm no economist but engage your common sense bro
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 4:14pm On Jul 09, 2015
CHANCEMAN:


Is the stock market restricted to only investors in Nigeria?

Who are the biggest investors in the Nigerian stock market?
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 4:26pm On Jul 09, 2015
jaybee3:


Are you dense or just plain stupid?

So if stock A was selling for N20 per stock pre election but now selling at N15 per stock post election due to the uncertainties, don't you think the correction is producing a perfect avenue for re-entry into the market?

The value of Naira is still the same for Nigerians. It only becomes expensive when they have to rely on imports.

Has the price of food changed?
Has the living standard changed
Has Inflation changed for upward movement as a direct result of the devaluation?

I'm no economist but engage your common sense bro

I just glanced through your profile to see who's this guy talking from two sides of his mouth...You're a typical example of the axiom "appearance deceives" because you looked sensible in your picture but reasons otherwise...

I thought you said it is FX why the jump now?
What correction are you talking about for an investor that needs to know policy direction of government before investing?...
So why jumping from stock market issues to daily living affairs?...are you listening to yourself at all? Is garri quoted in the stock market?...Mehn lots of incoherent, discordant, confused and myopic folks around...And to think that you were boasting about schooling me...smh...; Dgrin nawa...
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by ugogermany: 4:31pm On Jul 09, 2015
The whole world is talking about Biafrans!
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 4:32pm On Jul 09, 2015
CHANCEMAN:


Is the stock market restricted to only investors in Nigeria?

Kindly ignore the jaybee3 guy...who doesn't even know the difference between capital market and money market...Imagine asking me about price of garri when we are discussing stock market issues...gringringrin and he has London written boldly as his location... jaybee3; Is garri quoted in London stock market or do you trade on garri in fx?... or hunger is just twisting your medula oblongata? gringrin
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 4:32pm On Jul 09, 2015
Whynotthetruth:


I just glanced through your profile to see who's this guy talking from two sides of his mouth...You're a typical example of the axiom "appearance deceives" because you looked sensible in your picture but reasons otherwise...

I thought you said it is FX why the jump now?
What correction are you talking about for an investor that needs to know policy direction of government before investing?...
So why jumping from stock market issues to daily living affairs?...are you listening to yourself at all? Is garri quoted in the stock market?...Mehn lots of incoherent, discordant, confused and myopic folks around...And to think that you were boasting about schooling me...smh...; Dgrin nawa...

The Fundamental Issue
Ultimately, a currency fluctuates based on supply and demand characteristics. When more investors demand a currency, it will likely strengthen relative to other currencies. When there is excess supply, the opposite is true. This fundamental principle, however, is influenced by a many factors that lead to constant currency fluctuations each and every day. It is beyond the scope of this article to discuss many of these factors. The focus will be on how equity markets can provide an insight into the foreign exchange markets.

A Global Game
The foreign exchange markets are truly a global market, bigger than any other securities market. So when thinking about equities and their influence on forex markets, you truly have to think globally. The best companies to consider are naturally the ones with international operations that transact in various currencies. For example, as the biggest retailer on the planet, Wal-Mart deals with foreign exchange issues just as much as any other company you could think of. Another great name is Coca-Cola. These global consumer stocks transact with consumers all over the world and provide the best corporate glimpse into the forex market.

The commodities market can also be useful with respect to the forex market. Consider the main global commodity, crude oil. Global oil prices are denominated in U.S. dollars. As an example, the price of oil can spike because the value of the U.S. dollar declines relative to major global currencies. So the price of oil has to go up in order to equalize the price that other foreign countries buy in their home currencies. While other global commodities – sugar, corn, and wheat – offer similar insights, oil is the most significant commodity that relates to the foreign exchange markets.

A major equity market can also influence forex markets in another way. A weak currency favors exporters in that particular country. When your domestic currency is weak, exports are cheaper abroad. That helps fuel growth and profits of those exporters. When earnings are growing, equity markets tend to do well. Of course, the situation is most likely to occur in equity markets backed by the major global currencies – the U.S. dollar, the yen, the euro, the British pound, etc. (To learn more about commodities prices can affect global currency, read Commodity Prices And Currency Movements.)

Looking Forward
Because foreign exchange markets are dynamic and fluctuate very quickly, most industries serve as lagging indicators for the direction of forex markets. It's not until a company reports its earnings that one begins to know the effect of currency movements. Often, the company's results will be vastly different than analysts' estimates when forex has played a major role. It is at that point that investors can analyze the comments from management with regards to the future outlook of currency fluctuations. Things to look for are any indications of hedging strategies that a company will take going forward.

Trying to differentiate what types of assets – hard or soft – best identify forex movements is meaningless. Rather, what is important is the necessity of the asset. Things like food, gasoline, and medicine would be more useful than clothing or jewelry. A company like Kraft, which sells food on all over the world would be more useful than Tiffany's, the iconic jewelry store retailer.

Government Involvement
One would think that global financial institutions would serve a meaningful purpose in forex markets. They do in the sense that they help facilitate forex markets. But in terms of identifying direction, remember that the value of their main material – money – is influenced by government policy.
Unfortunately, equities don't provide any meaningful leading indicators. The value of money is determined by its supply and demand, which is generally determined by government via interest rate changes or other policy movements. Trying to use equities as a leading indicator would not be wise when governments can influence movements at will.
The reality is that equities alone are not a prudent way to predict the direction of currencies. Government balance sheets, monetary policy and interest rates play a major role in forex markets. Recent U.S. history serves as an important example. As a response to the 2007-2009 financial crisis, the Federal Reserve significantly increased the money supply by buying over a trillion dollars in bonds. While this program - commonly known as quantitative easing - helped the economy out of the worst recession since the Great Depression, the dollar weakened significantly against a basket of global currencies. This dollar weakening occurred even as U.S. equity prices surged from 2009 to 2011. (To read more on the financial crisis, see The 2007-08 Financial Crisis In Review.)

http://www.investopedia.com/articles/forex/11/how-equities-affect-fx-market.asp

1 Like

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 4:34pm On Jul 09, 2015
jaybee3:

Who are the biggest investors in the Nigerian stock market?
What difference does it make it to the dwindling equity values?
Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 4:36pm On Jul 09, 2015
Whynotthetruth:


Kindly ignore the jaybee3 guy...who doesn't even know the difference between capital market and money market...Imagine asking me about price of garri when we are discussing stock market issues...gringringrin and he has London written boldly as his location... jaybee3; Is garri quoted in London stock market or do you trade on garri in fx?... or hunger is just twisting your medula oblongata? gringrin

Dude, so because garri isn't quoted on the exchange mean price of food isn't being directly correlated with price movement in the stock exchange?

What affects the price of food?
Commodity and transport stocks right?

So that has no knock on effect?

Are you listening to yourself?

1 Like

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by jaybee3(m): 4:40pm On Jul 09, 2015
Whynotthetruth:


What difference does it make it to the dwindling equity values?

There are various factors affecting equities and it isn't restricted to the emerging markets.

China is slowing down
Greece is lingering
America is not growing at the predicted pace

There is an obvious knock on effect on with a slow down in major economies such as their inability to by commodity (Our key export).

If Nigeria's stock index is heavily weighted by energy stocks then surely that will weigh the market down , No?

3 Likes

Re: Weak Naira: Worried Investors Sell Shares For 6th Consecutive Day by Whynotthetruth(m): 4:46pm On Jul 09, 2015
jaybee3:


The Fundamental Issue
Ultimately, a currency fluctuates based on supply and demand characteristics. When more investors demand a currency, it will likely strengthen relative to other currencies. When there is excess supply, the opposite is true. This fundamental principle, however, is influenced by a many factors that lead to constant currency fluctuations each and every day. It is beyond the scope of this article to discuss many of these factors. The focus will be on how equity markets can provide an insight into the foreign exchange markets.

A Global Game
The foreign exchange markets are truly a global market, bigger than any other securities market. So when thinking about equities and their influence on forex markets, you truly have to think globally. The best companies to consider are naturally the ones with international operations that transact in various currencies. For example, as the biggest retailer on the planet, Wal-Mart deals with foreign exchange issues just as much as any other company you could think of. Another great name is Coca-Cola. These global consumer stocks transact with consumers all over the world and provide the best corporate glimpse into the forex market.

The commodities market can also be useful with respect to the forex market. Consider the main global commodity, crude oil. Global oil prices are denominated in U.S. dollars. As an example, the price of oil can spike because the value of the U.S. dollar declines relative to major global currencies. So the price of oil has to go up in order to equalize the price that other foreign countries buy in their home currencies. While other global commodities – sugar, corn, and wheat – offer similar insights, oil is the most significant commodity that relates to the foreign exchange markets.

A major equity market can also influence forex markets in another way. A weak currency favors exporters in that particular country. When your domestic currency is weak, exports are cheaper abroad. That helps fuel growth and profits of those exporters. When earnings are growing, equity markets tend to do well. Of course, the situation is most likely to occur in equity markets backed by the major global currencies – the U.S. dollar, the yen, the euro, the British pound, etc. (To learn more about commodities prices can affect global currency, read Commodity Prices And Currency Movements.)

Looking Forward
Because foreign exchange markets are dynamic and fluctuate very quickly, most industries serve as lagging indicators for the direction of forex markets. It's not until a company reports its earnings that one begins to know the effect of currency movements. Often, the company's results will be vastly different than analysts' estimates when forex has played a major role. It is at that point that investors can analyze the comments from management with regards to the future outlook of currency fluctuations. Things to look for are any indications of hedging strategies that a company will take going forward.

Trying to differentiate what types of assets – hard or soft – best identify forex movements is meaningless. Rather, what is important is the necessity of the asset. Things like food, gasoline, and medicine would be more useful than clothing or jewelry. A company like Kraft, which sells food on all over the world would be more useful than Tiffany's, the iconic jewelry store retailer.

Government Involvement
One would think that global financial institutions would serve a meaningful purpose in forex markets. They do in the sense that they help facilitate forex markets. But in terms of identifying direction, remember that the value of their main material – money – is influenced by government policy.
Unfortunately, equities don't provide any meaningful leading indicators. The value of money is determined by its supply and demand, which is generally determined by government via interest rate changes or other policy movements. Trying to use equities as a leading indicator would not be wise when governments can influence movements at will.
The reality is that equities alone are not a prudent way to predict the direction of currencies. Government balance sheets, monetary policy and interest rates play a major role in forex markets. Recent U.S. history serves as an important example. As a response to the 2007-2009 financial crisis, the Federal Reserve significantly increased the money supply by buying over a trillion dollars in bonds. While this program - commonly known as quantitative easing - helped the economy out of the worst recession since the Great Depression, the dollar weakened significantly against a basket of global currencies. This dollar weakening occurred even as U.S. equity prices surged from 2009 to 2011. (To read more on the financial crisis, see The 2007-08 Financial Crisis In Review.)

http://www.investopedia.com/articles/forex/11/how-equities-affect-fx-market.asp

And this post is to what end?

Do you even know the difference between money market and capital market?

Did you read the content of this post you sent to me?

Quit embarrassing yourself and disturbing my mention...

1 Like

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