Stocks gain N120bn in Nigeria’s rate hike week

Nigeria’s equities market rose by N120billion or 0.21 percent in the trading week ended Friday, September 27 as buy-side decisions on the local Bourse outweighed the sell-side activities.

Oil and gas, banking, and insurance stocks pushed the market higher in the review trading week, while consumer goods and industrial stocks were mostly on the sell-side during the week’s trading at the Nigerian Exchange Limited (NGX).

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) surprised market participants in the review week 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.

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MPC also raised the Cash Reserve Ratio of commercial banks by 500 basis points to 50 percent from 45 percent, and that of merchant banks by 200 basis points to 16 percent, while keeping other parameters unchanged.

Despite intensified risk-off sentiments amid elevated interest rates in the fixed income market, the stock market still closed most of the week’s sessions in green zone.

The market recorded three days of positives closes in the review week as against two days of negatives closes.

The NGX All-Share Index (ASI) and equities market capitalisation increased from preceding week’s lows of 98,247.99 points and N55.457 trillion respectively to 98,458.68 points and N56.577 trillion.

This month, the market has increased by 1.95 percent, while the year-to-date (YtD) return stood higher at +31.68 percent.