Nigeria’s equities market increased by 0.03 percent or N20 billion on Tuesday as hitherto cautious investors took buy decisions following the outcome of the 300th meeting of the Monetary Policy Committee (MPC), which held from May 19 to 20.
Investors who bought the shares of Nestle Nigeria Plc and other major gainers helped to reroute the market by 0.03 percent.
Nestle’s share price rose from N1331 to N1464.10, adding N133.10 or 10 percent, while Aradel Holdings led the league of other major decliners that pressured the market at the beginning of Tuesday’s trading. Aradel’s share price decreased from N503 to N460, losing N43 or 8.55 percent.
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After a 2-day meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria unanimously reached the following conclusions: retained the Monetary Policy Rate (MPR) at 27.50 percent; retained the asymmetric corridor around the MPR at +500bps/-100bps; retained the Cash Reserve Ratio (CRR) for deposit money banks at 50 percent, retained the CRR for merchant banks at 16 percent; and retained the liquidity ratio at 30 percent.
“Overall, the moderation of inflation, relative stability in the exchange rate, alongside bank recapitalisation, has helped to boost investors’ sentiment. We believe that the equities market is likely to have minimal impact on the MPC’s decision. However, we expect sustained positive investor interest, particularly in fundamentally strong real sector stocks,” said Meristem Research analysts in their recent note.
Meristem analysts had ahead of MPC decision expected the committee to hold rates steady, “extending its accommodative stance”.
They premised their “hold” position on the ongoing global tensions, a stabilising macroeconomic environment, and a continued focus on price stability.
Despite record sell pressure seen at the early stage of Tuesday’s trading, the market still rerouted northward, thereby strengthening the returns seen this year to +6.61 percent.
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At the close of trading on Tuesday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation increased slightly from 109,697.83 points and N68.945 trillion, respectively, to 109,730.47 points and N68.965 trillion.
Following a negative start to this week, analysts at Lagos-based Vetiva Research said the market heads into Tuesday’s trading session with a cautiously optimistic tone.
According to them, “Broad-based buying interest remains intact, especially in the consumer goods space, where momentum has been strong. If interest holds in key sectors and mid-cap names continue to attract flows, the index could stay buoyant, though sentiment may remain mixed around the banks”.
Fidelity Bank, UBA, Custodian Investment, Tantalizers and United Capital were actively traded stocks. In 18,795 deals, investors exchanged 497,060,142 shares worth N13.213 billion.
