HomeBUSINESSBUSINESS UPDATESMarket Dips as CBN Rate Hike Impacts Stocks

Market Dips as CBN Rate Hike Impacts Stocks

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WhatsApp Image 2024 05 16 at 1.03.11 PM

By Fasuyi Tolulope Samuel

Nigeria’s equities market experienced its first decline of the week on Wednesday, erasing the gains of previous days as investors reacted to the Monetary Policy Committee’s (MPC) recent decisions. The MPC of the Central Bank of Nigeria (CBN) increased the policy rate by 150 basis points to 26.25 percent, a move aimed at curbing inflation.
Alongside the rate hike, the MPC maintained the cash reserve ratio (CRR) for deposit money banks at 45 percent, kept the asymmetric corridor at +100bps/-300bps, and retained the liquidity ratio at 30 percent.
This tightening measure led to a negative market performance at the Lagos Bourse, with the market index declining by 0.16 percent. As a result, investors saw a loss of approximately ₦89 billion at the close of trading on the Nigerian Exchange Limited (NGX).
Multiverse Mining and Exploration Plc topped the list of decliners, with its share price dropping from ₦13.75 to ₦12.40, a loss of ₦1.35 or 9.82 percent. This was followed by The Initiates Plc, which fell from ₦2.00 to ₦1.80, losing 20 kobo or 10 percent, and Cornerstone Insurance, which decreased from ₦2.10 to ₦1.90, shedding 20 kobo or 9.52 percent.
Notable active stocks on the Bourse included Access Holdings, Zenith Bank, GTCO, UBA, and Transcorp. The trading session saw 271,708,015 shares exchanged in 7,383 deals, valued at ₦5.434 billion.
The market’s downturn on Wednesday pushed the year-to-date (YtD) return lower to 31.23 percent. The key performance indicators – the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation – decreased from the previous day’s highs of 98,285.33 points and ₦55.597 trillion, respectively, to 98,128 points and ₦55.508 trillion.
As investors continue to adjust their portfolios in response to the MPC’s measures, the market may see further volatility in the coming days.

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