MPR hike triggers reaction in stock market, as indices slide by N97b

In a reaction to the Central Bank of Nigeria’s monetary policy hike, investors on the Nigerian Stock Exchange (NSE) yesterday, embarked on profit taking as several stocks depreciated in value.

The development, which reversed the four-day rally in the stock market also pulled market capitalisation by N97 billion.

The CBN had yesterday increased its Monetary Policy Rate (MPR) to 12 per cent, which triggered reactions in the NSE, even as investors embarked on profit taking.

By this increase, the cost of funds to the banking system from the central bank will increase, thus leading to a rise in lending rate from commercial banks to businesses.

Specifically, at the All-Share Index lost 283.40 points or 1.09 per cent to close at 25,736.92 compared with 26,020.32 recorded on Tuesday. Similarly, the market capitalisation shed N97 billion or 1.09 per cent to close N8.853 trillion against the N8.950 trillion.

Analysts explained that the drop in indices was impacted by value depreciation recorded in the stocks of FBN Holdings, Total Nigeria, Mobil, Zenith Bank, Dangote Cement, GT Bank and Lafarge Africa.

Further review of yesterday’s transactions showed that Mobil Oil recorded the highest loss to lead the losers’ chart with a loss of N7.54 to close at N154.91 per share.

Total trailed with N7.49 to close at N142.46, while Dangote Cement depreciated by N4 to close at N164 per share. Guinness lost N3.07 to close at N108.93 and Seplat dropped by N3 to close at N308 per share.

On the other hand, Nigerian Breweries led the gainers’ table, increasing by N4.41 to close at N113.61 per share. Vitafoam followed with a gain of 20 kobo to close at N4.30, while NAHCO gained 19 kobo to close at N3,99 per share.

Oando increased by 9 kobo to close at N4 and Fidelity Bank appreciated by 6k to close at N1.40 per share. United Capital emerged the most active stock, exchanging 95.96 million shares worth N199.62 million.

Access Bank followed with an exchange of 60.75 million shares valued at N239.84 million and Multitrex traded 40 million shares worth N20 million.
FCMB Group sold 38.13 million shares worth N29 million and Zenith Bank transacted 28.68 million shared valued at N356.49 million.

In all, a total of 398.28 million shares worth N2.65 billion were exchanged by investors in 3,581 deals. This was against 344.12 million shares valued at N2.46 billion traded in 4,386 deals on Tuesday.