Nigeria’s equities market still increased by 0.12 percent or N35billion in the trading week ended Friday January 27, despite three trading sessions of negatives as against two sessions of positive closes.

Rising from its first meeting of the year, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) in the review trading week decided to sustain its tightening policy.

The sentiment at the Nigerian exchange improved slightly as investors anticipate impressive full year 2022 results from some of the listed companies.

This month, the market has increased by 2.74percent amid bargain hunting and profit taking in notable counters.

Except NGX Consumer Goods Index which was down by 1.09percent, all other sectoral key sectoral indices closed the review trading week in green. For instance, NGX Industrial Index was up by 0.37percent, NGX Insurance Index (+0.77percent), NGX Banking (+1.65percent), and NGX Oil & Gas (+1.73percent).

Read also: CAP full year PBT rises by 79% to N3.1bn

Related News

Week-on-week (WoW), the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its equities market capitalisation appreciated from 52,594.68 points and N28.646trillion to 52,657.88 points and N28.681trillion.

The 289th meeting of the Monetary Policy Committee (MPC) which had started on Monday ended on Tuesday, January 24.

The MPC raised the Monetary Policy Rate (MPR) by 100 basis points (bps) to 17.5percent; retained the asymmetric corridor of the MPR at +100 / -700 basis points; retained the Cash Reserve Ratio (CRR) at 32.5percent; and retained liquidity ratio at 30percent.

“Going forward, we expect the hawkish policy decision to contribute to a slowdown in equities in the short run. Also, we expect the decision to muddy the outlook for the fixed income market. On one hand, robust system liquidity and healthy maturity inflows will raise demand for fixed income instruments. On the other hand, investors will likely begin to price in the rate hike at subsequent primary auctions.

“Overall, we reckon the unexpected aggressiveness of the MPC will create a volatile fixed income market for the rest of the quarter, with the yield curve likely to record a bear flattening (short term interest rates rising faster than long term rates),” United Capital analysts said in their January 25 note.

More from our Markets Column
Read Next
SEC DG says capital market can finance PPP infrastructure projects

SEC wants more investments in commodities sector

By Iheanyi Nwachukwu • January 30, 2023

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp