Nigerian Bourse Sustains Uptrend Despite Rate Hike
The equities market booms over solid buying momentum as monetary authority pushed the benchmark interest rate by 50 basis points to 18.50% in a bid to fight the country’s inflation rate further.
Nigeria’s double-digit inflation rate and a weak local currency have reduced real return on naira assets, exposing investment in the fixed income market uncertainties. In the fixed income market, yield repricing has been slowed while investors continue to position in a riskier equity market.
“For now, benchmark interest rate hike will have little or no impacts on the equities market given an improving liquidity level in the fixed income market. The local debt capital market is expected to see yield repricing – Maybe after new government comes to power…”, analysts said in a chat with MarketForces Africa
Reacting to the interest rate spike, equities investors’ appetite for stock buying improved, extending the market’s positive sentiment to four consecutive trading days. Stock market performance indicators jumped by +0.58% while year-to-date return grew to 3.27%, resulting from about ₦167 billion record gain seen today.
Data from the local bourse showed that the market index or All-Share Index (NGX-ASI) inched higher by 306.41 basis points today, representing an increase of +0.58% to close at 52,927.60.
In their separate market reports, stockbrokers said market activities were up, as the total volume and total value traded for the day increased by +29.69% and +51.55% accordingly.
Atlass Portfolios Limited said in its market brief that approximately 455.18 million units valued at ₦7,833.75 million were transacted in 6,635 deals. ACCESSCORP was the most traded stock in terms of volume, accounting for 15.21% of the total volume of trades.
The financial services group was followed by UBA (14.62%), ZENITH BANK (8.25%), FIDELITYBK (7.14%), and GTCO (6.82%) to complete the top 5 on the volume chart,
SEPLAT was also the most traded stock in value terms, with 23.44% of the total value of trades on the exchange. NESTLE topped the advancers’ chart with a price appreciation of 9.98 percent.
The food producer counter was trailed by TRIPPLEG (9.88%), UACN (9.76%), UPL (+9.76%), RTBRISCOE (+9.68%), and thirty-one others.
Seventeen stocks depreciated, where CHELLARAM was the top loser, with a price depreciation of -9.82% to close at ₦1.47. MCNICHOLS lost 9.59%, WAPIC declined by 8.70%, ACADEMY fell by 7.14% and CUTIX dipped by 3.23%.
In that regard, the market breadth closed positive, recording 36 gainers and 17 losers. In addition, the market sector performance closed positively.
Today, four out of the five major market sectors were up, led by the Oil & Gas sector (+2.54%), followed by the Consumer goods sector (+2.07%), the Banking sector (+1.06%), and the Industrial sector (+0.23%), while the Insurance sector dropped by -0.10%.
Overall, equities market capitalisation rose by ₦166.84 billion, representing a growth of +0.58% to close at ₦28,819.40 trillion from ₦28,652.56 trillion the previous day. #Nigerian Bourse Sustains Uptrend Despite Rate Hike