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New Forex Policy: Stock Market Records Best Global Performance by dre11(m): 9:52am On Jun 17, 2016
• Gains N 500bn In Two Days

NEC Backs CBN On Flexible Rate


After recording massive loss in recent times , there seems to be a ray of hope for investors, as the stock market reacted positively with a gain of N 500 billion or 5.38 percent in the last two trading days following the release of framework for flexible forex policy by the Central Bank of Nigeria (CBN).

According to Bloomberg News, stocks climbed 2.6 percent yesterday, the best performance worldwide, after jumping 3.2 per cent the previous day (Wednesday).

The news agency further reported that Nigeria ’s 2023 dollar bonds slipped , sending the yield up 15 basis points to 7.21 percent, following the biggest gain since 2014 the previous day.

Analysts said banks and consumer goods companies led the charge, driven by expectations that a more flexible foreign exchange policy will boost dollar supply and lure back foreign investors.

Stocks climbed 2.14 percent after the close of trading yesterday, as the All -Share Index (NSE - ASI ) closed at 28,489.89 basis points, up from 27,891.96 points the previous day, while market capitalisation added N205 billion to close higher at N9.784 trillion from N9.579 trillion recorded the previous day, becoming the best performance worldwide , after jumping 3.17 per cent or N 295 billion the previous day.

The Central Bank of Nigeria (CBN ) had , on Wednesday , unveiled the new guidelines for the Nigeria Interbank Foreign Exchange (NIFEX) Market , allowing the exchange rate of the naira to be determined by the market forces of demand and supply.

Analysts believe that the new guidelines, which came after weeks of expectations, will reduce pressure on the local currency and attract foreign investors. CBN Governor, Mr. Godwin Emefiele , said the bank had resolved to, henceforth, deal with FX Primary Dealers (FXPDs) under the new arrangement .

He, however, stated that the existing ban on 41 items from accessing forex from the official window would remain in place . Reacting to this development , Managing Director, Crane Securities Limited, Mr. Mike Eze, said the liberalisation of the exchange rate is expected to impact positively on the economy, adding that the policy will attract foreign direct investment into the country.

He said: “The liberalisation is going to make the economy buoyant and since the capital market is the engine room of the economy, it will also help to revive the market, as foreigners will like to mop- up stocks that have good fundamentals. “The cheering news is that the Central Bank has come to realise that we need a flexible exchange rate regime rather than the fixed regime.

“The introduction of a flexible interbank market from a de facto peg of around N 197 would boost investors’ confidence and create more dollar liquidity .”

Also , analysts at Cowry Asset Management Limited said that capital market activities were expected to witness gradual recovery, as foreign exchange risk diminishes with the adoption of a more flexible exchange rate regime.

The decision surpassed many analysts ’ expectations of a managed float or two - tier foreign- exchange system, and may draw back foreign investors who sold Nigerian assets; concerned that devaluation would erode their returns. A free float was “one option we didn’t see coming ,” said Nema Ramkhelawan- Bhana, an analyst at Rand Merchant Bank in Johannesburg.

“It ’s definitely a step in the right direction. It’ s long overdue and it will go a long way toward an economic re-balancing . But it’s just the first step .

“A free - floating and weaker naira won ’ t be just good news . It may also fuel inflation , already at a sixyear high, and force the Central Bank to raise borrowing costs, hurting those who can least afford it: the poor,” he added.

“The economy is going to struggle for the rest of the year partly owing to the delay in implementing a floating exchange rate,” said Adewale Okunrinboye, an analyst at Lagos based Asset & Resource Management Co . “ The nation has suffered from the delay. Prices are going to come under pressure. ” Also, the National Economic Council (NEC) has approved the new foreign exchange policy. Governor Udom Emmanuel of Akwa Ibom said this in Abuja while briefing State House correspondents on the outcome of the NEC meeting presided over by Vice -President Yemi Osinbajo.

“Certainly , it is a welcome development. (There are) two areas that we needed to really take headlong. One is this flexible foreign exchange policy. And to make it a little bit more flexible right now, I think it is a welcome development.

“That is the opinion of almost everybody today who knows the advantages of having a flexible exchange policy. It is going to help the economy ; it is going to help ease of access . “And if you also listen to the details of what he (the CBN Governor ) gave, so that I don ’t actually repeat what he has said, I am sure at the end of the day, head or tail , we should be better off for it. ’’


https://newtelegraphonline.com/new-forex-policy-stock-market-records-best-global-performance/

6 Likes 1 Share

Re: New Forex Policy: Stock Market Records Best Global Performance by kingphilip(m): 10:18am On Jun 17, 2016
Ok
Re: New Forex Policy: Stock Market Records Best Global Performance by proeast(m): 1:33pm On Jun 17, 2016
Thats a welcome development, Nigeria going beyond this depth of hopelessness could result to anarchy! Our diaspora brethren could help both the economy & themselves by investing in assets like land here in Nigeria through remittances. Its a win-win situation because their hard currency is now over-valued since the CBN removed the peg on naira. We at Galaxy Properties are here to make sure that no shylock relative or friend rips you off, as we will have direct transaction with you while they come for inspection & feed back to you on their observation.

4 Likes 1 Share

Re: New Forex Policy: Stock Market Records Best Global Performance by martineverest(m): 1:33pm On Jun 17, 2016
my optimism is growing daily

2 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by erico2k2(m): 1:34pm On Jun 17, 2016
All this noise let Monday come.I thought they suspended forex trade until monday? ??

3 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by martineverest(m): 1:35pm On Jun 17, 2016
erico2k2:
All this noise let Monday come.I thought they suspended forex trade until monday? ??
wailer,stop listening to wrong info,take ur time to read and comprehend

56 Likes 1 Share

Re: New Forex Policy: Stock Market Records Best Global Performance by joey150(m): 1:35pm On Jun 17, 2016
Another lie??

Every new policy from this government always seems awesome the first few days.


I hope this one is for real

4 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by iamarvye(m): 1:35pm On Jun 17, 2016
H
Re: New Forex Policy: Stock Market Records Best Global Performance by cheddahboy(m): 1:35pm On Jun 17, 2016
How will this affect the layman or street hustlers? ..that's all I need to know

3 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by dgr8truth(m): 1:35pm On Jun 17, 2016
Re: New Forex Policy: Stock Market Records Best Global Performance by raphealolami(m): 1:35pm On Jun 17, 2016
Nigeria shall be great again and we will all witness and eat the fruit thereof.

5 Likes 1 Share

Re: New Forex Policy: Stock Market Records Best Global Performance by Lasgidy1(m): 1:36pm On Jun 17, 2016
Good things keep happening once The Ajala is not in town. I pray he stays put in his UK constituency till May 28th 2019

23 Likes 1 Share

Re: New Forex Policy: Stock Market Records Best Global Performance by ShutdownBrown24(m): 1:37pm On Jun 17, 2016
Abi
Re: New Forex Policy: Stock Market Records Best Global Performance by Anijay1212(m): 1:37pm On Jun 17, 2016
Slow and steady,we are getting there.

1 Like

Re: New Forex Policy: Stock Market Records Best Global Performance by Nobody: 1:37pm On Jun 17, 2016
Imagine they did this six months ago
The frontpage news of today would have been soo different.

3 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by msjijitar(m): 1:37pm On Jun 17, 2016
Nigeria's economy rebirth underway, _ LAI MOHAMMED . . . . . . . . . .. . . .! Buhari is working

3 Likes 3 Shares

Re: New Forex Policy: Stock Market Records Best Global Performance by laurel03(m): 1:40pm On Jun 17, 2016
9ja my country bad market for some people
Re: New Forex Policy: Stock Market Records Best Global Performance by priceaction: 1:40pm On Jun 17, 2016
In Nigeria, we want everything quick,quick cash,quick money,quick sex,quick economics effects and quick results. I believe with time we will see the effects of patience with focus. This is what Nigeria needs now not quickies.Slow,steady wins the.......
And by few weeks to come when foreign reserve is opened, and banks are forced to trade FX according to polices, then we likely see more boost. And for those stalking dollars inside hole hoping to get to 1000, na cockroaches go soon turn am to toilets.

9 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by babdap: 1:41pm On Jun 17, 2016
Make I hear Buhari is a duallard for this thread.

2 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by abtywo(m): 1:42pm On Jun 17, 2016
Summary please :PSummary please

1 Like

Re: New Forex Policy: Stock Market Records Best Global Performance by chuose: 1:42pm On Jun 17, 2016
[size=14pt]If this is true then it's good for Nigeria that Buhari is absent.
Let him remain in London and let Osunbade continue grin grin grin grin

we are waiting for the promise of N1 to $1
[/size]

6 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by dayyabuyau(m): 1:42pm On Jun 17, 2016
Wailers how market? cheesy

2 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by eleojo23: 1:43pm On Jun 17, 2016
I am just waiting for Monday to hear the new exchange rate. That is my major concern now 'cos I've got some dollar transactions to make.

2 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by Pavore9: 1:43pm On Jun 17, 2016
Waiting for next week.

1 Like

Re: New Forex Policy: Stock Market Records Best Global Performance by Miles300: 1:43pm On Jun 17, 2016
Ok , so what then will be the xchange rate this is something that they haven't come out with yet ..the floating of the currency is a short term policy that is aimed at stabilizing the currency and reduce pressure on the foreign reserve , the Cbn intend to make the foreign market an open market in which prices will be determined by market forces , supply and demand and in so doing more dollar will be made available but it remains to be seen what the xchange rate will be against the dollar .hopefully on Monday

1 Like

Re: New Forex Policy: Stock Market Records Best Global Performance by Oblitz(m): 1:43pm On Jun 17, 2016
his ego didn't let him do this months ago. imagine all the hardship we've been thru just because of one tyrant.

don't quote me o! i didn't mention any name o!

8 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by biggy26: 1:44pm On Jun 17, 2016
After much hesitation from Mr. President, he finally let go. Better late than never. Good development.
Re: New Forex Policy: Stock Market Records Best Global Performance by amtaken(f): 1:46pm On Jun 17, 2016
This is simply telling us that we are better off without Buhari.

Can he please stay put in London?

5 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by eleojo23: 1:47pm On Jun 17, 2016
Lasgidy1:
Good things keep happening once The Ajala is not in town. I pray he stays put in his UK constituency till May 28th 2019
grin

5 Likes

Re: New Forex Policy: Stock Market Records Best Global Performance by shaddoww: 1:48pm On Jun 17, 2016
All I sha wan see na development

1 Like

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