Stock Market Reacts To MPC Rates Hike, Falls By N15bn

The Nigerian equities market yesterday reversed prior day’s gains, closing lower by N15 billion as investors sold off Vitafoam Nigeria Plc and 16 others.

The renewed market rout on the local bourse follows the Monetary Policy Committee’s (MPC) hike in the Monetary Policy Rate (MPR) by 150 basis points (bps) to a 20-year high of 15.50 per cent.

Market analysts noted that the latest rate rise would exacerbate the existing gloomy sentiment on the Exchange, as rising fixed income rates would make the equity market less appealing to investors.

As a result, the All Share Index (ASI) decreased by 27.87 absolute points, representing a dip of 0.06 per cent to close at 49,161.45 points. Similarly, the market capitalisation lost N15 billion  to close at N26.517 trillion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Vitafoam Nigeria, Unilever Nigeria, Access Holdings, May & Baker Nigeria and GlaxoSmithKline Consumer Nigeria.

Also, market breadth closed negative, with 17 losers versus 14 gainers. Multiverse Mining and Exploration and Nigerian Exchange Group (NGX Group) recorded the highest price gain of 10 per cent each to close at N3.41 and N19.80 respectively, while Eterna followed with a gain 9.91 per cent to close at N6.32, per share.

Courteville Business Solutions went up by 8.89 per cent to close at 49 kobo, while Champion Breweries appreciated by 8.53 per cent  to close at N3.69,  per share. On the other hand, May & Baker Nigeria  led the losers’ chart by 9.79 per cent, to close at N3.50, per share. Regency Alliance Insurance followed with a decline of 7.69 per cent to close at 24 kobo, while VitafoamNigeria went down by 6.98 to close at N20.00, per share.

Unilever Nigeria lost 5.38 per cent to close at N12.30, while GlaxoSmithKline Consumer Nigeria shed 5.08 per cent to close at N5.60, per share.

However, the total volume traded rose by 16.73 per cent to 206.207 million shares, worth N2.362 billion, and traded in 3,777 deals.

Transactions in the shares of  Transnational Corporation of Nigeria (Transcorp) topped the activity chart with 38.462 million shares valued at N38.987 million. Zenith Bank followed with 35.274 million shares worth N710.833 million, while FCMB Group traded 30.185 million shares valued at N105.610 billion.

Vitafoam Nigeria traded 18.130 million shares valued at N362.765 million, while  Linkage Assurance transacted 8.890 million shares worth N4.178 million.