The stock market witnessed a second consecutive day of decline on Tuesday, dropping by 1.38% in response to the outcome of the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).
During the bi-monthly MPC meeting, the CBN raised the benchmark lending rate by 400 basis points to 22.75%, up from 18.75%, aimed at curbing inflation.
This meeting marked the first under the tenure of CBN Governor, Mr. Olayemi Cardoso, who assumed office in September 2023.
Consequently, the All-Share Index (ASI) fell by 1.38%, or 1,412.64 points, closing at 100,582.89 points compared to Monday’s 101,995.53.
The market capitalization also dropped by N773 billion, representing a 1.38% decrease, closing at N55.037 trillion compared to the previous session’s N55.810 trillion.
As a result, the Year-To-Date return declined to 34.52%.
The market downturn was primarily driven by sell-offs in MTN Nigeria, FBN Holdings, and Guaranty Trust Holding Company (GTCO), among others.
Meanwhile, a total of 280.46 million shares valued at N6.12 billion were traded in 9,141 deals, a decrease from the previous session’s 294.32 million shares valued at N6.72 billion traded in 9,957 deals.
ALSO READ: CBN raises interest rate by 400 basis points to 22.75 %
Further analysis showed a decline in trade turnover relative to the previous session, with the value of transactions down by 8.96%.
Commenting on the market performance, Vice Chairman of Highcap Securities Ltd., Mr. David Adonri, attributed the decline to changes in monetary policy, stating that the capital market is sensitive to such changes.
Adonri explained that the tightening of monetary policy by the CBN, which includes an increase in interest rates, could lead to a migration of financial assets from equity to debt, as witnessed in the market.
On the losers’ table, FBN Holdings and Multiverse Mining and Exploration Plc led with losses of 10% each, closing at N30.60 and N15.30 per share, respectively.
Conversely, Africa Prudential Plc and Omatek Venture topped the gainers’ table with gains of 9.86% each, closing at N7.80 and 78k per share, respectively.
Transcorp led in volume with 44.41 million shares traded at the value of N583.52 million, followed by Access Corporation with sales of 30.56 million shares worth N600.55 million.
Overall, market breadth closed negative with 24 laggards and nine gainers on the equity market.
NAN
