CBN rates’ cut triggers NSE 0.53% gain


The Nigerian Stock Exchange (NSE) appreciated by 0.53 per cent on the back of the cut in Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) announced by the Central Bank of Nigeria (CBN) in a move to stimulate lending to support the economy.

The CBN Tuesday cut MPR to 11 per cent from 13 per cent while the CRR was moved from 31 per cent to 20 per cent on the backdrop of global dwindling crude prices over the last year.

Meanwhile, In the money market, the rate cut also weakened the naira on the unofficial market, which fell 0.8 per cent to N242/USD. The currency is pegged at N197/USD on the official market.

The Equities market segment improved from seven negative consecutive trading sessions as lead market indicators appreciated by 0.53 per cent.

Specifically, the NSE All-Share index increased by 147.11 basis points to close at 27,743.92 basis points from 27,596.81 basis points while the market capitalization which opened at N9.488 trillion gained N50.6 billion to close at N9.538 trillion.

Oil and Gas was the only sector to close negative today, falling by 0.4 per cent driven by profit-taking  in Mobil that dropped by 4.99 per cent.

Banking and Industrial sector were both up by 1.05 per cent and 0.63 per cent, respectively as Dangote Cement gained 1.26 per cent, Guaranty Trust Bank rose by 4.71 per cent and Diamond bank significantly gained 5.08 per cent in today’s trade.

Twelve gainers led by Caverton Plc were recorded at the close of trade today. Caverton led with a 9.28 per cent or N0.22 kobo gain to close at N2.59 per share.

It was trailed by Diamond Bank Plc which added 5.08 per cent or N0.12 kobo to close at N2.48 per share while Ikeja Hotel Plc appreciated 4.95 per cent or N0.16kobo to close at N3.39 per share.

Guaranty Trust Bank Plc increased 4.71 per cent or N0.99 to close at N21.99 per share while Livestock Plc grew 3.45 per cent or N0.05 kobo to close at N1.50 per share.

Conversely, Eterna Plc led 20 equity decliners with a loss of 8.52 per cent or N0.15 kobo to close at N1.61 per share, trailed by Unity Bank Plc which dropped 5.26 per cent or N0.06 kobo to close at N1.08 per share while Mobil Plc dipped 4.99 per cent or N6.94 to close at N132.05 per share.

Julius Berger Plc was down by 4.99 per cent or N1.97 to close at N37.53 per share, while Honeywell Flour Plc shed 4.78 per cent or N0.10 kobo to close at N1.99 per share.

In all, investors traded 203.8 million shares worth N2.8 million in 2,408 deals compared to 176.4 million shares valued at N3.1 billion exchanged in 3,011 deals.

Analysts at InvestmentOne said the market activity reflect yesterday’s CBN Monetary Policy Committee decision with yields likely to fall in the coming days as investors would take profit.

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