Stocks Post Highest Daily Loss in 11 Months After CBN’s Rate Hike

By Dipo Olowookere

The decision of the Central Bank of Nigeria (CBN) to increase the monetary policy rate (MPR) to 13.0 per cent from 11.5 per cent on Tuesday after its third Monetary Policy Committee (MPC) meeting for the year had a spiral effect on local stocks.

At the Nigerian Exchange (NGX) Limited yesterday, the action of the central bank in two years further dampened the mood of investors, who, upon receiving the news, embarked on a selling spree.

This put pressure on the exchange as it shed 1.82 per cent, the highest it has lost in a single trading session in almost a year (11 months).

Consequently, the All Share Index (ASI) deflated by 961.87 points to 51,949.64 points from 52,911.51 points, while the market capitalisation shrank by N518 billion to N28.007 trillion from N28.525 trillion.

Analysis showed that the bearish mood was across the key sectors of the market as none closed in the green region. The consumer goods index lost 1.21 per cent, the insurance space fell by 1.09 per cent, the industrial goods counter depleted by 0.61 per cent, the banking sector crashed by 0.39 per cent, while the energy index depreciated by 0.32 per cent.

However, the activity chart was green due to the cross deals witnessed in Ecobank and others, causing the trading volume, value and number of deals to rise by 173.48 per cent, 149.79 per cent and 25.54 per cent respectively.

A total of 720.2 million shares worth N8.9 billion were traded in 6,096 deals compared with the 263.3 million shares worth N3.6 billion traded in 4,856 deals on Monday.

Ecobank recorded the highest trades by volume for selling 257.6 million stocks valued at N3.0 billion, Jaiz Bank traded 78.0 million shares worth N69.7 million, Access Holdings exchanged 60.5 million equities worth N605.0 million, UAC Nigeria transacted 52.2 million shares for N673.1 million, while Transcorp sold 31.4 million equities valued at N39.7 million.

Business Post reports that investor sentiment was weak during the session as there were 39 price losers and 17 price gainers led by Japual, which grew by 10.00 per cent to 33 kobo.

Industrial and Medical Gases rose by 9.89 per cent to N10.00, MRS Oil grew by 9.70 per cent to N16.40, Abbey Mortgage Bank appreciated by 9.09 per cent to N1.80, while Academy Press improved by 8.15 per cent to N1.46.

Conversely, Guinness Nigeria recorded the highest decline after it dropped 10.00 per cent to sell at N88.20, Global Spectrum Energy Services lost 9.77 per cent to trade at N2.77, Axa Mansard depreciated by 9.73 per cent to N2.04, Chams went down by 8.70 per cent to 21 kobo, while Veritas Kapital depleted by 8.70 per cent to 21 kobo.