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UPDATE 2-Nigerian stocks surge in volatile trades as funds bet on equities

Commodities Nov 12, 2020 14:54
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(Adds further stock gains, circuit breaker, background)
By Chijioke Ohuocha
ABUJA, Nov 12 (Reuters) - Nigerian stocks posted their
biggest daily gain in more than 5-1/2 years on Thursday,
triggering a circuit breaker on the bourse for the first time to
halt volatility after the index hit a five-percent limit.
Domestic funds piled into shares, taking gains on the index
.NGSEINDEX to 6.23%, or 35,342.46 points. Stocks rose to a
more than two-year high on Thursday, extending gains for a fifth
session to a level last seen in August 2018.
Shares last gained 8.3% in April 2015, when Muhammadu Buhari
became the first Nigerian to oust a president through the ballot
box, putting him in charge of Africa's biggest economy.
Local funds have fuelled the recent stock market rally after
rotating out of the debt market due to low yields.
Stocks have been rising since last month after the central
bank unexpectedly cut interest rates the previous month to spur
growth, triggering a re-rating on equities.
The rate cut coupled with low bond yield have boosted cash
on Nigeria's money market, which had excess liquidity after
foreign investors dumped local assets when the novel coronavirus
pandemic caused oil prices to crash earlier this year.
The index of Nigeria's top 10 lenders .NGSEBNK10 rose
7.69% to lead the charge, while consumer goods stocks
.NGSEFBT10 jumped 5.9% and oil stocks .NGSEOILG5 climbed
1.84%.
To further lift sentiment, benchmark Brent crude oil,
Nigeria's main export, on Wednesday rose to a more than
two-month high above $45 a barrel on hopes for an effective
COVID-19 vaccine. Nigeria's third-biggest listed company, Airtel Africa
AIRTELAFRI.LG , BUA Cement BUACEMENT.LG , Sterling Bank
STERLNB.LG and Cadbury CADBURY.LG among others, rose the
maximum 10% allowed on the exchange.
A total of 63 companies advanced and eight firms declined,
while 90 others saw no trades.

UPDATE 2-Nigerian stocks surge in volatile trades as funds bet on equities
 

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