Nigeria’s equities market furthered its northward trend on Wednesday, rising by 0.58percent or N167billion to defy rate hike by the Monetary Policy Committee (MPC).
The Central Bank of Nigeria (CBN) on Wednesday after the two-day Monetary Policy Committee (MPC) meeting, the last under President Muhammadu Buhari’s administration, raised its benchmark interest rate also known as the Monetary Policy Rate (MPR) by 50basis points to 18.5percent.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation increased further from preceding day’s low of 52,621.19 points and N28.652trillion respectively to 52,927.60 points and N28.819trillion.
Thanks to stocks like Nestle Nigeria which rose most, from N1,043.80 to N1,148, adding N104.20 or 9.98percent. Also, UACN rallied from N8.20 to N9, adding 80kobo or 9.76percent; while Tripple Gee and Company increased from N3.24 to N3.56, adding 32kobo or 9.88percent. University Press made the top advancers league, after rising from N2.05 to N2.25, adding 20kobo or 9.76percent.
Also, the market’s positive return year-to-date (YtD) increased further to 3.25 percent.
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Banking stocks were most traded on Wednesday as Access Corporation, UBA, Zenith Bank, Fidelity Bank and GTCO topped the league of actively traded stocks.
Africa’s biggest economy saw its Gross Domestic Product (GDP) grow by 2.31 percent (year-on-year) in real terms in first-quarter (Q1) 2023, down from 3.52 percent in Q4 2022 and 3.11 percent in the same period last year, according to the National Bureau of Statistics (NBS).
“The Nigerian economy was negatively impacted by the Naira liquidity crunch of first-quarter (Q1) 2023, which had a more telling effect on the informal economy and resulted in moderated GDP growth of 2.31percent (versus 3.52percent in Q4’2022). The tamer growth is behind our projection of 2.6percent and Bloomberg’s consensus of 2.8percent.
“This outcome is also consistent with the indications provided by high-frequency data, such as the Purchasing Managers’ Index (PMI) and business confidence surveys, which pointed to a significant contraction in economic activity during the review period,” said CardinalStone Research analysts in their May 24 note.
Analysts at Lagos-based Meristem research had earlier this week said they expect the positive mood in the market to persist this week, “considering the attractive upside on tickers which investors should take advantage of”. Though they did not rule out the possibility of profit-taking activities on tickers that had gained in the previous weeks, they however expect the overriding sentiment in the market to be bullish.