Nigeria’s stock market could not sustain early trading rally seen on Thursday as it reverted to the negative region by 0.12percent or N67billion at the close of trading by 2.30pm.
Investors sold mostly stocks of PZ Cussons, Wema Bank and Morison. These stocks occupied topmost positions among Thursday’s major laggards on the Bourse.
As sell pressure weighed the stocks, Wema Bank share price dropped from a high of N8.66 to N7.80, losing 86kobo or 9.93percent, while that of PZ Cussons decreased from N27.30 to N24.60, losing N2.70 or 9.89percent.
Morison also made the top laggards league after its share price decreased from N2.05 to N1.85, down by 20kobo or 9.76percent.
The market has decreased this week by 4.24 percent and its negative close on Thursday follows analysts earlier views that trading in stocks of the 155-member companies will revert to bearish trend unless there was major upside in the large-cap counters.
The Nigerian Exchange Limited (NGX) All Share Index (ASI) decreased from preceding day’s high of 101,362.38 points to 101,239.1 points while the value of listed equities decreased to N55.396trillion from N55.463trillion seen the preceding trading day.
The market’s year-to-date (YtD) return is still in positive region of 35.39 percent.
In 7,248 deals, investors exchanged 252,997,201 shares worth N4.944billion. FBN Holdings, UBA, Access Holdings, Prestige Assurance, and Zenith Bank were actively trading stocks.
Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange Limited and the London Stock Exchange, said on Thursday it will issue its full year (FY) 2023 audited financial results on Thursday February 29, 2024.
According to the energy company, “At 1:00pm WAT (GMT+1) (Lagos) and 12:00pm GMT (London) on Thursday, February 29, 2024, the Executive Management team will host a webcast to present the Company’s 2023 Full Year Audited Financial Results”.
An unexpected decision by the MPC may trigger a negative reaction from investors
The Monetary Policy Committee (MPC) first meeting of the year is scheduled to hold on February 26 and 27 2024. The members as anticipated will among others focus on several key factors like inflation, depreciating Naira, as well as money supply.
“We expect the MPC to conclude that the equities market remains resilient to happenings in the fixed income market and thus are not likely to place emphasis on considering policy directions that will boost growth in equities asset prices.
“We highlight that the impact of previous monetary policy hikes has remained subdued in the equities market as investors largely anticipated the decisions. Nevertheless, investors are keen on the outcome of this meeting to aid clarity of policy direction being the first convene of the new leadership. As such, an unexpected decision by the MPC may trigger a negative reaction from investors,” Meristem research analysts said in their recent report ahead of MPC meeting.
The analysts further noted that, “Considering the sustained inflationary pressures and the anticipation of a
continued uptrend, we foresee the Committee raising the policy rate by 100 basis points (bps) to 19.75percent. Moreover, we anticipate an increase in the Cash Reserve Ratio (CRR) by 250bps to 35percent, with other policy parameters remaining unchanged. Additionally, considering the necessity of aligning the monetary policy rate with prevailing market interest rates, we opine that a ‘HOLD’ stance is unlikely”.
