Notwithstanding the continuous spread of COVID-19 pandemic the Nigerian economy has witnessed, the local bourse boosted by the remote trading recorded a gain of N110 billion during the month. Investigation by New Telegraph showed that activities on the stock market, which opened the trading month at N12.769 trillion in market capitalisation and 24,479.22 in index on 1st July, closed at N12.881 trillion and 24,693.73 index points on 29th of July, hence has earned monthly gain of about N112 billion or 0.88 per cent.
The All-Share Index also grew by 214.51 basis points or 0.88 per cent. The index measures the performance of the stock market and also reflects how prices of stocks have moved, which in turn determines how much investors made as gains or losses. To maintain the integrity of the market and in order for it to continue to stimulate economic growth, the Nigerian Stock Exchange (NSE) activated its business continuity plan on March 23. Through the activation, the Exchange has continued trading during normal hours and days by providing remote trading access for Dealing Member Firms through FIX Protocol and Virtual Private Network (VPN) platforms.
Buying sentiment towards the All Share Index (ASI) found further support from some resilient blue chip firms during the month under review. According to the CBN Governor, Mr. Godwin Emefele, the Nigerian economy is still very strong and resilient in the face of COVID-19 with the banking sector weathering the current storm. However, Mr. Lukman Otunuga, Senior Research Analyst at FXTM, said as coronavirus cases in Africa’s largest economy hit above 42,000, concerns are likely to mount over renewed lockdown and rising unemployment. “Given the constant disruptions, chaos and economic instability caused by COVID-19, the outlook for Nigeria and many other emerging markets remains clouded by uncertainty. “Rising inflationary pressures in Nigeria are likely to discourage the CBN from cutting interest rates anytime soon,” he said.
He noted that the Central Bank left benchmark interest rates unchanged at 12.5 per cent during its meeting in July, and this may remain the status quo for the rest of 2020. “With interest rates expected to remain unchanged, more attention will be directed to unconventional monetary policy tools and fiscal policy which is seen as a sharper and more effective weapon against the coronavirus menace. “The Federal Executive Council (FEC) approved a N2.3 trillion stimulus boost at the end of June to bolster key sectors of the economy with a 12-month timeline for implementation. Will this have the desired impacts on economic growth? Time will tell,” he said