Nigeria’s stock market continued its upward momentum on Wednesday, defying the Central Bank of Nigeria’s (CBN) recent decision to raise the Monetary Policy Rate (MPR). The market gained 0.42 percent, adding N241 billion by the close of trading.
In its latest move to combat inflation, the CBN’s Monetary Policy Committee (MPC) raised the MPR by 50 basis points to 27.25 percent from 26.75 percent, marking the fifth consecutive hike this year. The decision, announced after a two-day meeting in Abuja, came as a surprise to many market participants.
Flour Mills of Nigeria Plc, whose majority shareholder, Excelsior Shipping Company Limited, intends to buy out minority shareholders, was one of the biggest gainers on the Nigerian Exchange Limited (NGX). The company’s share price surged from N55 to N60.50, representing a 10 percent increase. Flour Mills had recently notified the NGX and the public about its planned transaction via a scheme of arrangement.
Seplat Energy Plc also performed strongly, with its share price jumping by 10 percent from N3,730.10 to N4,103.10. Both Seplat Energy and Flour Mills led the list of top advancers, despite predictions that the banking sector would dictate market direction following the unexpected MPR hike.
Meanwhile, the Olayemi Cardoso-led CBN also raised the Cash Reserve Ratio (CRR) for commercial banks by 500 basis points to 50 percent and for merchant banks by 200 basis points to 16 percent, while other monetary parameters remained unchanged.
Fidelity Bank, FBN Holdings, Transcorp, UBA, and AXA Mansard were the most traded stocks, with 603,301,607 shares worth N12.575 billion exchanged in 9,723 deals on Wednesday.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation also saw gains, rising from the previous day’s figures of 98,568.59 points and N56.640 trillion to 98,987.42 points and N56.881 trillion.
Credit: Businessday NG (Text Excluding Headline)
