Stocks Rise 1.2% On Rates Retention, Cabinet Announcement
CHUKWUMAH KELECHUKWU
Nigeria’s equity market turned bullish on Tuesday after the national assembly announced President Buhari’s list of ministerial appointees just as the Central Bank of Nigeria (CBN) decided to leave benchmark interest rates unchanged at 13.5 percent.
From previous day’s 0.69 percent decline to 27,808.69, NSE All Share Index which measures performance of traded stocks rose 1.21 percent to 28,144.87 basis points while market capitalization increased by N163.8billion to N13.716trillion up from N13.552trillion.
The sharp increase was driven by gains recorded by about 21 stocks led by heavily capitalized shares of Nestle Nigeria Plc and Dangote Cement Plc.
Market operators attributed stocks rebound to developments around ministerial appointments and CBN benchmark interest rates decision which left rates unchanged at 13.5 percent, stressing both developments were critical to the fate of the market.
As of Monday, July 22 the market had plunged 11.5 percent since January this year which operators had blamed on uncertainties over government’s policy direction.
“I think concerns about policy direction which investors had been waiting for are getting to a head. I have no doubt that the market correction will begin to price in fundamentals of the stocks that deserve price mark up,” a senior dealing member of the exchange said in an informal chat.
Following bargain hunting across bellwether stocks –MTNN, DANGCEM and NESTLE, the benchmark index advanced by 1.21 percent to close at 28,144.87 points, consequently, the Month-to-Date and Year-to-Date losses moderated to 6.08 percent and 10.45 percent respectively.
Gains were evident across all sectors, save for the Insurance (-0.18%) and Oil & Gas (-0.66%) sectors, while the Industrial Goods (+3.91%), Consumer Goods (+1.66%) and Banking (+0.46%) indices all closed positive.
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