From being the worst performing market among its emerging market peers, the Nigerian equities market has made record gains for three weeks in a row, surging by 11.9 per cent, following renewed demand for stocks by foreign portfolio and domestic investors on the back of introduction of the new foreign exchange window for investors and exporters by the Central Bank of Nigeria (CBN).
In a bid to boost liquidity in the forex market, the CBN introduced the window last April that allows market participants to determine the exchange rate of the naira on a willing buyer, willing seller basis.
But to promote liquidity and professional market conduct, the central bank may from time to time participate in the market.
THISDAY reports that transactions under the new window include invisible transactions such as loan repayments, loan interest payments, dividends/income remittances, capital repatriation, management service fees, consultancy fees, software subscription fees, technology transfer agreements, personal home remittances and any such other eligible transactions including “miscellaneous payments” as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.
CBN, however, excluded international airlines ticket sales’ remittances.
Following the introduction of the new window for investors and exports, the Nigerian Stock Exchange (NSE) All-Share Index has spiked by 11.92 per cent in the last three weeks, from 25,189.27 to close at 28,192.46 last Friday, while market capitalisation gained N1.03 trillion or 11.81 per cent, from N8.716 trillion to N9.741 trillion.