Stock Market Drops by N503.32bn on Uncertainty over MPC Outcome 

Kayode Tokede

The Nigerian stock market has declined by N503.32 billion in the first three days of this week as investors’ profit-taking persisted in high-mid capitalised companies listed on the Nigerian Exchange Limited (NGX).

Analysts attributed the downward trend  to uncertainty amid the scheduled next week’s Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

At the last MPC meeting, members voted to hike the benchmark interest rate by 200 basis points to 24.75 per cent from 22.75 per cent amid rising inflation rate (33.69 per cent as of April 2024).

The CBN governor. Dr. Olayemi Cardoso had announced the retention of the Cash Reserve Ratio (CRR) of deposit money banks at 45 per cent. However, the MPC adjusted the CRR of merchant banks from 10 per cent to 14 per cent.

Cardoso had stated that it here was “every indication” that the MPC would “do whatever is necessary” to contain the soaring inflation.

Meanwhile, opening the new week, the domestic stock market recorded a loss of N297 billion following profit-taking activities in Seplat Energy Plc and 23 others, and on the following day, market capitalisation declined by N133 billion on selloffs in Dangote Sugar Refinery Plc and 19 others.

As of the close of the stock market yesterday, the stock market closed on a negative note as selloffs on Nigerian Exchange Group Plc and 29 others dragged the capitalisation lower by N74 billion.

Consequently, the NGX ASI dropped by 0.91 per cent to close yesterday at 97,343.42 basis points from 98,233.76 basis points the stock market opened for trading this week.

For yesterday trading activities, the  downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Nigerian Exchange Group, PZ Cussons Nigeria, UAC of Nigeria (UACN), Zenith Bank and United Bank for Africa (UBA).

As measured by market breadth, market sentiment was negative, as 30 stocks lost relative to 13 gainers. Custodian Investment recorded the highest price gain of 9.63 per cent to close at N10.25, per share. International Energy Insurance followed with a gain of 9.29 per cent to close at N1.53, while Sovereign Trust Insurance rose by 7.89 per cent to close at 41 kobo, per share.

NPF Micro Finance Bank went up by 7.10 per cent to close at N1.96, while Champion Breweries appreciated by 6.11 per cent to close at N3.30, per share.

On the other hand, FTN Cocoa Processors and PZ Cussons Nigeria led the losers’ chart by 10 per cent each to close at N1.44 and N20.25 respectively, while Sterling Financial Holdings Company followed with a decline of 9.89 per cent to close at N4.01, per share.

The Initiates Plc (TIP) depreciated by 9.78 per cent to close at N2.03 and UACN declined by 9.76 per cent to close at N13.40, per share.

The total volume traded declined by 16.0 per cent to 355.554 million units, valued at N7.143 billion, and exchanged in 7,333 deals. Transactions in the shares of Guaranty Trust Holding Company (GTCO) topped the activity chart with 71.872 million shares valued at N3.038 billion. Custodian Investment followed with 65.466 million shares worth N785.263 million, while Access Holdings traded 24.167 million shares valued at N416.727 million.

Tantalizers traded 21.305 million shares valued at N22.414 million, while Prestige Assurance sold 17.536 million shares worth N8.955 million.