Stock market dip by 0.07% as inflation figure lowers buy interest

Nigeria’s stock market opened the new week in red, down by 0.07percent or N19billion as investors interest in equities dampens amid rising rate of inflation.

“We expect the local bourse to remain in a lull in anticipation of the upcoming MPC meeting scheduled on the 26th and 27th of September. We recommend that investors and fund managers continue to cherry-pick stocks with solid underlying fundamentals amid an overall bearish-dominated bourse,” said United Capital research analysts in their September 19 note to investors.

The market’s positive return year-to-date (YtD) has decreased to 15.74percent. The market’s All-Share Index (ASI) and capitalisation decreased from preceding trading day’s highs of 49,475.42 points and N26.686trillion respectively to 49,440.21 points and N26.667trillion. In 3,386 deals, investors exchanged 67,369,216 shares valued at N1.480billion. FBN Holdings, Zenith Bank, GTCO, Mutual Benefit, and Sovereign Trust were top-5 traded stocks.

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University Press led the league of decliners after dropping from N1.80 to N1.63, down by 17kobo or 9.44percent, while Etranzact Plc topped the advancers, after rising from N2.91 to N3.20, up 29kobo or 9.97percent.

Also, Meristem research analysts said, “We expect lower buying interest in the equities market following the recently released inflation figure. The inflation rate climbed to 20.52percent above the market consensus of 20.25percent and this may influence the decision of the monetary authorities in their next meeting.

“The expectation of a rate hike would keep investors’ activities in the equities market muted, hence buying interest would be low. We also consider the bond auction this week, which could further stifle system liquidity and cause a flow of funds from the equities market. Consequently, we expect the market to close in the negative zone,” Meristem analysts added.