By Dipo Olowookere
Some of the gains recorded by the Nigerian Exchange (NGX) Limited on Monday were given up on Tuesday following the raising of the benchmark interest rate by 1.5 per cent to 15.5 per cent by the Central Bank of Nigeria (CBN).
The apex bank announced this hike in rate after its Monetary Policy Committee (MPC) meeting in Abuja. It explained that it was to tame the rising inflation, currently at 20.52 per cent.
Investors were unhappy with this action, and they abandoned Nigerian stocks, causing the bourse to deflate by 0.06 per cent at the close of transactions.
More profit-taking is expected in the coming days as traders attempt to leave the volatile space for a less-risky fixed income market, where the return on investment is nearing 15 per cent.
Business Post observed more sell-offs in the banking and consumer goods sectors as they respectively lost 0.65 per cent and 0.52 per cent yesterday. However, the energy and insurance counters grew by 0.20 per cent and 0.06 per cent, respectively, while the industrial goods space closed flat.
At the close of business, the All-Share Index (ASI) was down by 27.87 points to 49,161.45 points from 49,189.32 points as the market capitalisation decreased by N13 billion to N26.519 trillion from N26.532 trillion.
May and Baker recorded the highest price decline on Tuesday, losing 9.79 per cent to N3.50, with Regency Assurance declining by 7.69 per cent to 24 Kobo. Vitafoam fell by 6.98 per cent to N20.00, Unilever Nigeria went down by 5.38 per cent to N12.30, and GlaxoSmithKline dropped 5.08 per cent to N5.60.
On the flip side, NGX Group and Multiverse topped the gainers’ log after their values rose by 10.00 per cent each to N19.80 and N3.41, respectively. Eterna gained 9.91 per cent to N6.32, Courteville grew by 8.89 per cent to 49 Kobo, and Champion Breweries expanded by 8.53 per cent to N3.69.
Analysis of the trading data showed that investor sentiment remained weak as the market breadth finished negative with 17 price losers and 13 price gainers.
Transcorp was the busiest stock yesterday as it transacted 38.5 million units for N39.0 million, followed by Zenith Bank, which sold 35.3 million units worth N710.8 million. FCMB traded 30.2 million shares valued at N105.6 million, Vitafoam transacted 18.1 million stocks for N362.8 million, and Linkage Assurance sold 8.9 million equities valued at N4.2 million.
In all, investors bought and sold 206.2 million stocks worth N2.4 billion in 3,679 deals on Tuesday, in contrast to the 119.3 million stocks worth N854.8 million traded in 3,580 deals on Monday. This implied that the trading volume, value and number of deals increased by 72.87 per cent, 176.38 per cent and 2.77 per cent apiece.
Adedapo Adesanya