Nigerian stock index falls 4-1/2 month low, naira firms

Nigerian stocks fell to a four and half months low on Monday, undermined by heavyweight cement and energy firms, while the naira currency firmed on the parallel market on weak demand.

The local bourse index declined 2.59 percent to 29,909 points, its lowest since March 25, with Dangote Cement , which accounts for a third of market capitalisation, and energy firm Seplat fell 5 percent apiece to 171.48 naira and 270.75 naira each.

Nigeria’s stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, fell for the sixth consecutive day as investors switched funds to shorter-dated money market instruments with higher yields.

Four Mills of Nigeria shed 4.96 percent to 26.63 naira, Nigerian unit of South Africa’s Standard Bank Stanbic IBTC fell 4.98 percent to 18.88 naira and beverage maker Cadbury was down 4.98 percent to 31.64 naira.

On the foreign exchange market, the naira traded at 217 to the dollar in the parallel market, better than the 221 it closed last Friday amid improved dollar liquidity as central bank sustained its dollar sales in the market, traders said.

The central bank increased the frequency of dollar sales to the bureau de change operators two weeks ago to twice-weekly from the usual once a week previously in a move meant to increase liquidity in the market and support the local currency.

Traders said many people are no longer willing to hold dollars after the central bank banned dollar cash deposits in dollar accounts held locally by bank customers.