Nigerian stocks rise to one-week high on hopes recession will be short-lived

ABUJA: Nigerian stocks climbed to a one-week high on Wednesday after the central bank expressed optimism that it expected a recession in Africa's biggest economy to be short-lived, citing a smaller than forecast contraction in the third quarter.

The all share index rose 1.25pc to 34,769 points, a level last seen on Nov. 19, lifted by the banks and consumer goods stocks.

The Nigerian economy slipped into a recession in the third quarter, causing stocks to decline to a two-week low on Monday, while the currency eased on the black market due to dollar shortages in the country.

Central Bank Governor Godwin Emefiele, however, said on Tuesday that the contraction in growth had bottomed out after the third quarter shrunk less than the second quarter. He expected the recession to end by the first quarter next year.

Stocks had been rising since last month to become the world's best performing after the central bank unexpectedly cut interest rates the previous month to spur growth. The bank kept rates on hold on Tuesday.

Shares of a total of 37 companies gained on Wednesday while 12 declined and another 100 recorded no trades.

Drugmaker May & Baker rose 10pc, the maximum allowed on the bourse, while energy firm Eterna Oil, Flourmills, Axa Mansard, Transcorp, FCMB among others climbed more than 9.5pc each.