Investors gain N167bn as Nestle, others help market rate rise

Nigeria’s equity market extended its northward trend on Wednesday, rising 0.58% or N167 billion to defy a rate hike by the Monetary Policy Committee (MPC).

The Central Bank of Nigeria (CBN) on Wednesday raised its benchmark interest rate as the monetary policy rate (MPR) by 50 basis points, following a two-day Monetary Policy Committee (MPC) meeting, the last under the administration of President Muhammadu Buhari. increased. 18.5 percent.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equity market capitalization rose to 52,927.60 points and N28.819trillion from the previous day’s low of 52,621.19 points and N28.652trillion, respectively.

Thanks to stocks such as Nestle Nigeria, which rose the most, adding N104.20 or 9.98 per cent, from N1,043.80 to N1,148. Also, UACN increased from N8.20 to N9, adding 80kobo or 9.76 percent; While Triple G & Co rose by 32kobo or 9.88 per cent from N3.24 to N3.56. University Press made the Top Advancers League, adding 20kobo or 9.76 per cent, after rising from N2.05 to N2.25.

Also, the positive Year-to-date (YtD) return of the market increased to 3.25 per cent.

Also read: FMDQ says April secondary market turnover fell to N12.55trn

Banking stocks were most traded on Wednesday as Access Corporation, UBA, Zenith Bank, Fidelity Bank and GTCO topped the league of actively traded stocks.

Africa’s largest economy saw its gross domestic product (GDP) grow by 2.31 percent (year-on-year) in real terms in the first quarter (Q1) of 2023, up from 3.52 percent in the fourth quarter of 2022 and the same rate last year. It was 3.11 per cent during the period. According to the National Bureau of Statistics (NBS).

“The Nigerian economy was negatively affected by the first quarter (Q1) 2023 naira liquidity crunch, which had a greater impact on the informal economy and resulted in a GDP growth of 2.31 percent (3.52 percent in Q4’2022). Tamer growth is behind our estimate of 2.6 percent and Bloomberg’s consensus of 2.8 percent.

Analysts at Cardinalstone Research said, “The result is also in line with signals provided by high-frequency data, such as the Purchasing Managers’ Index (PMI) and business confidence survey, that point to a significant contraction in economic activity during the review period.” point out.” In his note dated 24 May.

Analysts at Lagos-based Meristem Research said earlier this week that they expect the market to remain positive this week, “given the attractive gains on tickers that investors should take advantage of”. While he did not rule out the possibility of profit-booking activity on the tickers which had increased in the past weeks, he expects the bullish sentiment to prevail in the market.