Stock market further defies Nigeria's rate hike

Nigeria’s stock market continued its northward movement on Wednesday, further defying the Central Bank of Nigeria (CBN) recent hike in monetary policy rate (MPR).

The market rose by 0.42 percent or N241billion at the close of trading session on Wednesday.

In latest push to rein in inflation, the Monetary Policy Committee (MPC) of the CBN at the end of its two-day meeting in Abuja on Tuesday surprised market participants by increasing its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 50 basis points to 27.25 percent from 26.75 percent, the fifth straight hike this year.

Expectedly, Flour Mills of Nigeria Plc which its majority shareholder wants to buy out minority shareholders rallied most on the Bourse. Flour Mills recently informed the Nigerian Exchange Limited (NGX) and the investing public of the plans by its majority shareholder, Excelsior Shipping Company Limited to buy out the minority shareholders.
The transaction will be implemented by way of scheme of arrangement between the Company and its shareholders.

Another major gainer at the end of Wednesday trading on the Nigerian Exchange Limited is by Seplat Energy Plc.

Related News

Seplat Energy and Flour Mills led the league of top advancers on Wednesday despite analysts expectation that the banking sector will still dictate market direction, as market participants digest the surprise 50 basis points (bps) hike in the MPR to 27.25 percent.

Flour Mills moved up from N55 to N60.50, adding N5.50 or 10 percent, while Seplat Energy share price rose from N3,730.10 to N4,103.10, adding N373 or 10 percent.

Fidelity Bank, FBN Holdings, Transcorp, UBA and AXA Mansard shares were most traded on Wednesday as investors in 9,723 deals exchanged 603,301,607 shares worth N12.575 billion.

The Olayemi Cardoso-led CBN had also raised the Cash Reserve Ratio (CRR) of commercial banks by 500 basis point to 50 percent from 45 percent, and that of merchant banks by 200 basis points to 16 percent, while keeping other parameters unchanged.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation increased further from preceding trading day’s lows of 98,568.59 points and N56.640 trillion respectively to
98,987.42 points and N56.881 trillion.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with over 18 years journalism experience writing on banking, finance and capital markets. 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).

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp