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UPDATE 1-Nigerian stocks rally to 3-week high as investors eye reforms

Published 23/08/2019, 14:24
© Reuters.  UPDATE 1-Nigerian stocks rally to 3-week high as investors eye reforms
DANGCEM
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NGSEINDEX
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NGSEFBT10
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NGSEOILG5
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NGSEBNK10
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By Chijioke Ohuocha

LAGOS, Aug 23 (Reuters) - Nigerian stocks extended their

rally on Friday to a three-week high following President

Muhammed Buhari's inauguration of cabinet ministers, boosting

hopes for reforms that could lift growth for Africa's biggest

economy, traders said.

Nigeria's economy has grappled with low growth since

recovery from recession three years ago. Buhari, who began a

second four-year term in May, has pledged to revive the economy.

But investors have been waiting for policy signals that could

lift economic growth.

Buhari assigned portfolios to ministers on Wednesday,

retaining 14 from his past administration while appointing 29

new ministers, in a cabinet made up of political loyalists,

analysts say, lifting a layer of uncertainty for reforms.

The stock market .NGSEINDEX rose for the third session on

Friday to 27,830 point, up 0.73%.

Analysts said the rise was a relief rally and that half year

corporate results, particularly from banks, were also

supportive. Local banks have been trading at low book values,

weighed down by weak sentiment over the economy.

Stocks had been on a losing streak since end of May, when

Buhari was sworn in, due to his failure to appoint a cabinet

months after winning a second term in February's election. That

prompted foreign investors to trim their holdings.

However, bonds had seen foreign inflows as the central

bank's tight monetary policies boosted yields.

Buhari has pursued protectionist policies since first taking

office in 2015. He has backed a currency intervention that has

seen the central bank pump billions of dollars into the foreign

exchange market and policies aimed at curbing imports to boost

local production.

The index of Nigeria's top 10 lenders .NGSEBNK10 gained

2.18% while oil .NGSEOILG5 and consumer .NGSEFBT10 stocks

rose marginally. Dangote Cement DANGCEM.LG , the biggest firm

by market cap, climbed 1.2%, to help lift the index.

(Editing by Alexis Akwagyiram, Editing by William Maclean)

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