Nigerian Stock Market ɗips as CBN holds rates

…investors shift to Fixed Income

The Nigerian equities market closed lower this week, with the All-Share Index falling 0.6% week-on-week to 109,028.62 points, driven by the Central Bank of Nigeria’s (CBN) decision to maintain the Monetary Policy Rate (MPR) at 27.5%.

Confiance News gathered that Cordros Research attributes it to profit-taking in recent outperformers, and capital flows shifting toward the fixed income market.

According to the report, key decliners include Transcorp Hotel (-15.0%), MTN Nigeria (-2.9%), Transcorp (-4.4%), Access Holdings(-8.1%), and Fidelity Bank (-10.3%). As a result, month-to-date returns eased to 3.1%, and year-to-date returns dropped to 5.9%.

Despite the bearish sentiment, trading activity surged, with volume and value rising 43.2% and 11.0% week-on-week, respectively. Sectoral performance was mixed: the Oil & Gas (-3.4%) and Banking (-1.5%) indices fell, while Consumer Goods (+2.2%), Insurance (+0.7%), and Industrial Goods (+0.7%) indices recorded gains.

Cordros Research projects cautious trading in the near term due to a lack of positive catalysts, with profit-taking in recent gainers balanced by bargain hunting in undervalued stocks. “In the medium term, market sentiment will likely be influenced by macroeconomic trends and movements in fixed income yields,” the firm noted.