Nigerian Exchange Swells amidst Interest Rate Hike
The equities segment of the Nigerian Exchange (NGX) rises further on Tuesday amidst the Central Bank of Nigeria’s (CBN) policy committee’s hawkish rendition. The CBN committee today hiked the benchmark lending interest rate by another 100 basis points to 16.50% over inflation worries.
Acting as new catalysts, the thundering monetary tightening is expected to trigger fresh yield repricing in the fixed income market. The equities market had suffered weak sentiment as the year-to-date has been reduced far behind the average inflation rate.
Trading data from the local bourse shows that for the third session, investors’ sentiment has improved amidst Dangote Cement’s plan to buyback 10% of its outstanding shares.
Key performance indicators grew by 0.51%, while the stock market year-to-date return advanced to 5.18%. The market index or the Nigerian Exchange All-share index increased by 227.49 basis points to close at 44,929.33.
While stock market investors’ risk-off sentiment wanes, there appear to be portfolios rebalancing toward growth, and value stock as trading activities closed mixed. READ: Bond, T-Bills Yields Track Higher after Interest Rate Hike
Market data show that total volume traded for the day reduced by -20.68%, while the total value traded for the day increased by +97.51%, a possible decision to rebalance as the year begins to window down.
In a market report, Atlass Portfolios Limited stockbrokers stated that approximately 126.56 million units valued at ₦3,851.75 million were transacted in 3,383 deals.
Today, ZENITH BANK was the most traded stock in terms of volume, accounting for 10.71% of the total volume of trades. The tier-1 lender performance was followed by FIDELITYBK (9.61%), MTNN (9.48%), AIICO (8.66%), and TRANSCORP (8.08%) to complete the top 5 on the volume chart.
Meanwhile, telecom company MTNN was the most traded stock in value terms, with 62.33% of the total value of trades on the exchange. UPDCREIT topped the advancers’ chart with a price appreciation of 10.00 percent – the maximum allowable daily capital price appreciation.
The company was trailed by INTBREW (9.41%), SOVRENINS (8.33%), FIDSON (6.99%), UACN (6.74%), and twenty-two (22) others. Seven stocks depreciated, topped by RTBRISCOE with a price depreciation of -10.00% to close at ₦0.27.
PRESCO lost 7.17%, CHAMS declined by 4.17%, and SUNUASSUR fell by 3.45%. On the loser’s table, CHIPLC went down by 3.28% while FBNH dipped by 1.79% as the market breadth closed positive, recording 27 gainers and 7 losers.
Stockbrokers said the market performance was positive, as four out of the five major indices recorded gains, led by the Banking index which pooped up by1.10%.
It was trailed by the Industrial sector which recorded a 0.33% gain, the Consumer goods sector improved by 0.23%, and the Insurance index rose by 0.18%. The Oil & Gas sector declined by -0.23%. # Nigerian Exchange Swells amidst Interest Rate Hike