Market Mood Dips as CBN Holds MPR at 27.5% — Investors Shift to Safer Assets
The Nigerian stock market closed the past week on a bearish note, following the Central Bank of Nigeria’s (CBN) decision to maintain the Monetary Policy Rate (MPR) at 27.5%. The move, while aimed at curbing inflation, spurred a wave of profit-taking and capital flight into the fixed income market, dampening investor sentiment on the equities front.
Key Market Reactions:
• The Nigerian Exchange All Share Index (NGX ASI) declined by 0.6%, closing at 109,028.62 points, down from 109,710.37 points.
• The downturn was fueled by sharp declines in some notable stocks:
• Transcorp Hotel: -15.0%
• Fidelity Bank: -10.3%
• Access Corporation: -8.1%
• Transnational Corporation: -4.4%
Fidelity Bank’s selloff was particularly aggressive, tied to investor concerns over a judgment debt and potential winding down, which the bank attempted to clarify midweek through a public statement on the NGX platform.
Performance Metrics:
• Month-to-Date (MtD) return now stands at 3.1%
• Year-to-Date (YtD) return is at 5.9%
• Despite the bearish tone, trading volume and value surged, up by 43.2% and 11.0% respectively on a Week-on-Week (W/W) basis.
Sector Snapshot:
• Decliners:
• Oil & Gas Index: -3.4%
• Banking Index: -1.5%
• Gainers:
• Consumer Goods Index: +2.2%
• Insurance Index: +0.7%
• Industrial Goods Index: +0.7%
Outlook from Analysts:
• Cordros Research forecasts continued cautious trading this week, citing a lack of new positive catalysts. They expect a blend of profit-taking and bargain hunting, with macroeconomic indicators and fixed income yields shaping market direction in the medium term.
• InvesData Consulting warns investors to remain cautious, pointing to portfolio reshuffling, earnings season, and the urgent need for clear economic reform policies to restore growth confidence.
The Nigerian stock market closed the past week on a bearish note, following the Central Bank of Nigeria’s (CBN) decision to maintain the Monetary Policy Rate (MPR) at 27.5%. The move, while aimed at curbing inflation, spurred a wave of profit-taking and capital flight into the fixed income market, dampening investor sentiment on the equities front.
Key Market Reactions:
• The Nigerian Exchange All Share Index (NGX ASI) declined by 0.6%, closing at 109,028.62 points, down from 109,710.37 points.
• The downturn was fueled by sharp declines in some notable stocks:
• Transcorp Hotel: -15.0%
• Fidelity Bank: -10.3%
• Access Corporation: -8.1%
• Transnational Corporation: -4.4%
Fidelity Bank’s selloff was particularly aggressive, tied to investor concerns over a judgment debt and potential winding down, which the bank attempted to clarify midweek through a public statement on the NGX platform.
Performance Metrics:
• Month-to-Date (MtD) return now stands at 3.1%
• Year-to-Date (YtD) return is at 5.9%
• Despite the bearish tone, trading volume and value surged, up by 43.2% and 11.0% respectively on a Week-on-Week (W/W) basis.
Sector Snapshot:
• Decliners:
• Oil & Gas Index: -3.4%
• Banking Index: -1.5%
• Gainers:
• Consumer Goods Index: +2.2%
• Insurance Index: +0.7%
• Industrial Goods Index: +0.7%
Outlook from Analysts:
• Cordros Research forecasts continued cautious trading this week, citing a lack of new positive catalysts. They expect a blend of profit-taking and bargain hunting, with macroeconomic indicators and fixed income yields shaping market direction in the medium term.
• InvesData Consulting warns investors to remain cautious, pointing to portfolio reshuffling, earnings season, and the urgent need for clear economic reform policies to restore growth confidence.