Nigeria’s stock market maintained its positive trajectory on Tuesday by 0.47 percent as the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held rates steady after its 2-day meeting. At 28.69 percent year-to-date (YtD) return as at Tuesday, Nigeria’s equities market has joined Africa’s best-performing stocks.
The MPC retained the Monetary Policy Rate (MPR) at 27.50percent, retained the asymmetric corridor around the MPR at +500bps/-100bps, retained the Cash Reserve Ratio (CRR) for deposit money banks at 50 percent, retained the CRR for merchant banks at 16 percent, and retained the liquidity ratio at 30 percent.
Investors continued to take positions in Nigerian stocks following foreign exchange (FX) reforms, moderating fixed income yields, banking sectors recapitalisation and expectation of interim dividend payment by the market’s regulars.
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Buy activities in stocks like Dangote Sugar Refinery, The Initiates, Sovereign Trust Insurance, Nigerian Enamelware, and University Press majorly drove the market higher.
Dangote Sugar Refinery stock increased most on NGX from N51 to N56.10, after adding N5.10 or 10 percent. The Initiates rallied from N11.03 to N12.13, adding N1.10 or 9.97percent. Sovereign Trust Insurance also increased from N1.22 to N1.34, adding 12kobo or 9.84percent.
Nigerian Enamelware share price moved from N20.35 to N22.35, adding N2 or 9.83 percent, while University Press increased from day-open low of N5.60 to N6.15, adding 55kobo or 9.82 percent.
At the close of trading on Tuesday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation increased from preceding day’s lows of 131,826.77 points and N83.393 trillion to 132,451.73 points and N83.789 trillion.
Access Holdings, Ellah Lakes, UBA, GTCO and Lafarge Africa were actively traded stocks as investors in 32,365 deals exchanged 762,595,236 shares valued at N26.426billion.
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“We anticipate some capital rotation into the equities market this week, driven by the continued moderation in fixed income yields. Additionally, investor appetite for bargain opportunities, particularly within the banking sector, is expected to persist,” Coronation Research analysts said in their July 21 note to investors.
Though the stock market opened this week on a positive note, analysts at Lagos-based Vetiva Research believe that underlying weakness is emerging. Ahead of Tuesday’s trading, they expected investors to turn attention to “whether sidelined sectors, particularly consumer and insurance, can attract flows”. “If rotation fails and the ASI slips below the 131,000 points mark, a short-term pullback may set in,” the analysts said in their July 21 post-trading note.