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Geregu, others cause market’s N35bn gain amid focus on MPC meeting

Nigeria’s equities market saw 0.12 percent increase on Monday, driven majorly by improved buy-side activities favouring stocks like Geregu Power, John Holt, and other penny stocks like Chams, ABC Transport, and Secure Electronic Technology.

Geregu topped others advancers after its share price rose from N138.80 to N148.40, up by N9.60 or 6.92percent. It was followed by John Holt which rose from 96kobo to N1.05, up by 9kobo or 9.38percent. Investors booked N35billion gain on the Bourse.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its equities market capitalisation appreciated from preceding day’s 52,594.68 points and N28.646trillion respectively to 52,657.69 points and N28.681trillion on Monday, January 23.

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

“While there are competing arguments for both sides of a positive and negative market outing this week, the latter seems to be more likely. For one, there is a likelihood of another hike {100 basis points (bps) in our view} in the Monetary Policy Rate at the Monetary Policy Committee meeting this week.

“In line with that and the higher amount on offer vis-à-vis the previous auctions, we think that yield would rise at the upcoming Treasury Bills Primary Market Auction which could make the equities market less attractive.

“Additionally, technical indicators, including the Relative Share Index (RSI) point and Price Action, point to a bearish market. Thus, we expect the market to close in the negative region this week,” said Meristem research analysts.

FBN Holdings, Chams, GTCO, Transcorp, and Sterling Bank were actively traded stocks on the Nigerian Exchange. In 4,078 deals, investors exchanged 143,736,077 shares valued at N1.775billion.

United Capital analysts said in their January 23 note that, “At current levels, we caution investors that the equities market is due a breather and thus we anticipate some of the profit taking that started last week will continue into this week’s sessions. Nevertheless, we view this as an opportunity to buy attractive stocks on dips as we retain the view that depressed interest rate levels will sustain the fuel for an equity market uptrend in Q1-2023”.