The naira saw a slight appreciation against the dollar, but analysts warn that external risks, including declining crude oil prices, could affect its stability

At the close of trading on Wednesday, the naira appreciated by 0.16% to 1530.52/$ from 1532.93/$ in the previous trading session, according to data from the Central Bank of Nigeria (CBN).

Also read: Financial services sector on Nigerian exchange hits N9.49tn market capitalisation

Despite this slight appreciation, analysts noted that the naira’s stability remains fragile, with external factors, including declining crude oil prices, posing potential risks.

The naira traded as high as 1545/$ and as low as 1500/$, marking a fluctuation within a narrower range than seen on Tuesday. In the parallel market, however, the exchange rate remained unchanged at 1,585.00/$, which has widened the spread for speculative traders.

The gap between the official and parallel market rates has now narrowed to about 3.07% from 3.40% earlier in the week.

While analysts point out the slight depreciation, they also suggest that the market is stabilising due to structural reforms and increased forex inflows into the country.

Tilewa Adebajo, CEO of CFG Advisory, explained that the exchange system has evolved, with more people using digital platforms to send money to Nigeria, which is contributing to the naira’s relative stability.

“The reason we are seeing some stability is because there is a new system where everyone uses one portal to buy and sell their dollars or whatever currency,” Adebajo said.

She also noted that many foreign inflows are coming through these digital platforms, which provide the official exchange rate, thus reducing reliance on the parallel market.

Comercio Partners, in an investor note, praised the recent stability of the naira, noting that the currency has remained within the N1,450-1,550 range against the dollar, helping to curb rising import costs.

The investment house credited the naira’s relative stability to improved forex inflows, a positive current account position, and the CBN’s efforts.

However, they cautioned that this stability could be threatened by external factors, especially a decline in global crude oil prices. So far, Brent crude prices have fallen by 5.5% year-to-date, driven by expectations of rising global oil supply, policy shifts, and weaker demand. With the U.S.

planning to increase oil production and OPEC+ beginning to unwind voluntary production cuts in April 2025, oil prices could face additional downward pressure.

Experts at CardinalStone also echoed these concerns, highlighting that while the naira’s stability is supported by structural reforms and positive inflows, the outlook remains uncertain due to external risks like oil price volatility.

“Nigeria’s long-term stability hinges entirely on sustained forex inflows, competitive market dynamics, and the Central Bank keeping its eye on the ball,” their report stated. “One policy misstep and we’re right back to square one.”

The Nigerian Exchange’s financial services sector reached N9.49tn, driven by banking stocks like Guaranty Trust Holding, Zenith, and Access Holdings

The financial services sector on the Nigerian Exchange (NGX) has closed with a significant market capitalisation of N9.49 trillion, underpinned by strong performances from key banking stocks.

Also read: Lagos Government responds to devastating gas tanker explosion, pledges tougher safety measures

Guaranty Trust Holding Company Plc (GTCO), Zenith Bank Plc, and Access Holdings Plc emerged as major drivers of this growth, marking another milestone for the Nigerian stock market.

Guaranty Trust Holding Company Plc led the charge, maintaining its position as the most valuable financial institution in Nigeria, with a market capitalisation of N2.07 trillion.

GTCO’s stock closed at N60.50 per share, reaffirming investor confidence in the company. Zenith Bank Plc followed closely behind, recording a market capitalisation of N1.96 trillion. Zenith’s share price increased by 0.42% to N47.75, demonstrating a solid performance amidst challenging market conditions.

Access Holdings Plc also maintained a strong market position with a capitalisation of N1.24 trillion. Despite a slight decline of 0.64% in its share price to N23.20, Access Holdings continues to be a key player in the financial services sector.

United Bank for Africa Plc (UBA) recorded a market capitalisation of N1.21 trillion, with its stock trading at N35.50. This reflected a decline of 2.61% in its share price, yet UBA continues to maintain a robust presence in the market.

First Bank Holdings Plc, one of Nigeria’s oldest financial institutions, had a market capitalisation of N1 trillion. The bank’s share price closed at N27.90, representing a 2.28% drop, reflecting some market challenges.

In contrast, Fidelity Bank Plc proved resilient, with a market capitalisation of N843.57 billion. Fidelity’s share price appreciated by 1.19%, closing at N16.80, signalling investor confidence despite the overall market trend.

Ecobank Transnational Incorporated saw its market capitalisation rise to N532.14 billion, with its stock trading at N29.00 per share. Sterling Financial Holdings Company Plc, however, had a slight dip of 0.19% in its share price, closing at N5.31, resulting in a market capitalisation of N241.38 billion.

Jaiz Bank Plc, a non-interest banking institution, continued to show potential for growth, recording a market capitalisation of N150.71 billion. The bank’s share price rose by 3.05% to N3.38, reinforcing its growing market presence.

Wema Bank Plc, despite showing a 4.19% decline in its share price to N10.30, maintained a market capitalisation of N220.73 billion. Unity Bank Plc saw no trading activity, but its market capitalisation remained at N17.65 billion.

FBN Holdings Plc stood out as the top tier-one banking stock on the Nigerian Exchange, with its shares appreciating by 17.65% year-to-date at the close of trading on Friday. This growth reinforces the positive outlook for the financial sector, which continues to attract investors despite market fluctuations.

The performance of the financial services sector, driven by banking stocks, is expected to contribute further to the overall growth of the Nigerian Exchange in the coming months.

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