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Interbank Lending Rate Rises on Tight Liquidity

• As Market Capitalisation depreciates by 2.31%

Nigeria’s interbank lending rate rose to around 15 percent on Friday, July 7, from 5 percent the previous week after commercial lenders paid for dollar and treasury bill purchases, draining liquidity, traders said.
The Central Bank of Nigeria, CBN, sold dollars twice last week, thereby tightening naira liquidity, according to traders. It also sold N25.67 billion in treasury bills last Wednesday, which further pushed up borrowing costs.
“The interbank rate traded above the 40 percent level on Wednesday,” the trader said, because of the treasury bill auction, adding that rates later dropped sharply after the CBN repaid matured bills worth N65 billion.
Borrowing costs are expected to rise this week, since the apex bank may keep up its forex interventions to stabilise the local currency, a trader said.
Meanwhile the Nigeria Stock Exchange, NSE, All-Share Index and Market Capitalisation depreciated by 1.99 per cent and 2.31 per cent to close last week trading at 32,459.17 and N11.187 trillion respectively.
Similarly, all other Indices finished lower last week trading with the exception of the NSE Insurance and the NSE Industrial Goods Indice that appreciated by 1.10 per cent and 0.22 per cent, while the NSE ASeM index closed flat.
A total turnover of 1.061 billion shares worth N12.295 billion in 18,847 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.171 billion shares valued at N11.458 billion that exchanged hands the previous week in 13,763 deals according to NSE data.
The Financial Services Industry (measured by volume) led the activity chart with 802.195 million shares valued at N7.331 billion traded in 11,334 deals; thus contributing 75.62 per cent and 59.63 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 109.378 million shares worth N174.604 million in 1,024 deals. The third place was occupied by Consumer Goods Industry with a turnover of 62.992 million shares worth N2.405 billion in 3,021deals.
Trading in the Top Three Equities namely – Zenith International Bank Plc, Transnational Corporation of Nigeria Plc and FBN Holdings Plc (measured by volume) accounted for
317.099 million shares worth N3.223 billion in 3,823 deals, contributing 29.89per cent and
26.21per cent to the total equity turnover volume and value respectively.
A total turnover of 1.061 billion shares worth N12.295 billion in 18,847 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.171 billion shares valued at N11.458 billion that exchanged hands last week in 13,763 deals.
The Financial Services Industry (measured by volume) led the activity chart with 802.195 million shares valued at N7.331 billion traded in 11,334 deals; thus contributing 75.62% and 59.63% to the total equity turnover volume and value respectively. The Conglomerates
Industry followed with 109.378 million shares worth N174.604 million in 1,024 deals. The third place was occupied by Consumer Goods Industry with a turnover of 62.992 million shares worth N2.405 billion in 3,021deals.
Trading in the Top Three Equities namely – Zenith International Bank Plc, Transnational Corporation of Nigeria Plc and FBN Holdings Plc (measured by volume) accounted for
317.099 million shares worth N3.223 billion in 3,823 deals, contributing 29.89 per cent and
26.21 per cent to the total equity turnover volume and value respectively.
Also a total of 358 units of Federal Government Bonds valued at N344, 610.97 were traded last week in 7 deals, compared with a total of 7 units valued at N16, 486.85 transacted previous week in one deal.

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