Shares of Nigeria’s listed banks and other value counters like International Breweries, Seplat, and Dangote Sugar Refinery continued on Wednesday to lead the bull race at the Lagos bourse which rose by 3.13 percent at the close of trading. Investors booked N992billion gain.

Nigeria officially floated its local currency, the naira, after years of sticking with a hard peg that scared investors and drained the greenback from the economy.

Buyers and sellers of foreign currency in the official FX market now quote rates they find comfortable in the FX market, as against previous practice where rates were dictated by the Central Bank of Nigeria (CBN).

“While this new exchange rate favours banks with positive net FX exposure, as they would book exchange rate gains on this major depreciation of this Naira, I would expect many of the banks to raise new equity capital to shore up their capital base soon.

“Notably, over 40 percent of Nigerian banks risk asset base is dollarised and that means that the risk weighted asset increases significantly on the back of this depreciation of the Naira and that would put pressure on capital adequacy ratios of banks,” according to Abiola Rasaq, former Economist and Head, Investor Relations at United Bank for Africa Plc.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities Market Capitalisation increased further from preceding day’s low of 58,163.59 points and N31.670 trillion respectively to 59,985.10 points and N32.662trillion. In 11,947 deals, investors exchanged 1,296,655,522 shares worth N21.080billion.

International Breweries led the market’s league of advancers after its share price rose from N5 to N5.50, up by 50kobo or 10percent. Also, Seplat Energy was up from N1200 to N1320, adding N120 or 10 percent. Dangote Sugar Refinery moved from N23 to N25.30, adding N2.30 or 10percent.

While banking stocks continued to rally on the back of the reforms by the new administration, Vetiva Research analysts had said they expect to see similar trading pattern, as sentiment is expected to remain positive. “However, we do not rule out profit taking in some of the counters that have experienced significant upside in recent sessions,” the analysts added.

According to Lagos-based analysts at Coronation Research, “On Monday a key adviser to President Bola Ahmed Tinubu told Bloomberg news that the Naira’s multiple foreign exchange rates would be merged within three months.

“FX rate unification was a feature of the President’s inaugural address on May 29, and we think it follows logically from his termination of fuel subsidies”. Meanwhile the equity market rose by 3.99percent Monday “in response and there are huge implications for different sectors and stocks,” they added.