Nigeria naira flat, stocks gain as central bank meets on rates

Nigeria’s naira traded flat on Monday while stocks gained for the fourth day as domestic investors snapped up banking and oil shares in anticipation of the central bank’s decision on rates and any word on forex controls on Tuesday, traders said.

The stock index, which has the second-biggest weighting on the MSCI frontier market index after Kuwait, rose 0.58 percent to 23,965 points. The index has lost 16.8 percent in 15 days of trading this year.

Investors are closely watching Tuesday’s central bank meeting to see whether authorities will ease forex controls and allow the currency to depreciate, traders said.
The bank has been battling to defend the currency hard hit by the fall in oil prices which has prompted investors to flee.
The naira has weakened to cross a threshold of 300 to the dollar on the parallel market, the same level as Friday, while it closed around the peg rate of 197 to the dollar the official interbank window.

Nigerian Stock exchange CEO Oscar Onyema in an agency interview this month stated that foreign investors were on the sidelines waiting for exchange rate stability before returning to the market.

He expected 2016 to be challenging for the market as oil prices plunged and the domestic economy faltered.

Among the top gainers were Guinness with a 10.24 percent gain, followed by Zenith Bank 7.79 percent, Guaranty Trust Bank up 6.05 percent and Flour Mills of Nigeria up 6.02 percent. ($1 = 199.00 naira)