27th November, 2024
By Rukayat Adeyemi
The Nigerian stock market lost ₦209 billion in market capitalisation on Wednesday as investors responded negatively to the Central Bank of Nigeria’s (CBN) recent interest rate hike.
The Monetary Policy Committee (MPC) of the CBN increased the Monetary Policy Rate (MPR) by 25 basis points to 27.50% in November, up from 27.25% in September.
CBN Governor, Mr Olayemi Cardoso, announced the decision after the 298th MPC meeting in Abuja, stating that the hike aimed to address inflation, which rose to 33.87% in October.
As a result, the Nigerian Exchange Ltd. (NGX) market capitalisation declined from ₦59.178 trillion to ₦58.969 trillion, marking a 0.35% drop.
Similarly, the All-Share Index fell by 330 points to close at 97,296.57, down from 97,626.27 on Tuesday, reducing the Year-to-Date return to 30.12%.
Key decliners, including Aradel, Fidelity Bank, and Nigerian Breweries, contributed to the slump and investors’ loss.
The market breadth closed negative, with 26 stocks declining while 23 gained. JohnHolt led the losers’ chart with a 10% drop to ₦9.90 per share, while Sunu Assurances topped the gainers’ list with a 9.97% increase to ₦4.19 per share.
Market activity surged, with 822.46 million shares worth ₦10.29 billion traded in 9,385 deals, representing a 28.07% increase in transaction value compared to the previous session.
Japaul Gold led in trading volume with 115.93 million shares, while Guaranty Trust Holding Company (GTCO) dominated value transactions, recording ₦1.52 billion.
Analysts at Cowry Asset Management Ltd. had anticipated mixed market movements in light of the MPC’s decision, citing its influence on interest rate expectations and investment strategies.
They also noted opportunities for strategic investments in fundamentally strong stocks as November trading concludes and fund managers prepare for year-end portfolio adjustments.
