The Nigerian Exchange Limited (NGX) ended last week on a negative note as the stock market reacted to the Central Bank of Nigeria’s (CBN) latest interest rate hike. The Monetary Policy Committee (MPC) of the CBN increased the Monetary Policy Rate (MPR) by 25 basis points to 27.5% from 27.25%, marking the sixth consecutive hike this year. This brings the total rate increase in 2024 to 875 basis points, compared to 225 basis points in 2023.
Following the MPC decision, the NGX All-Share Index (ASI) declined by 0.3% week-on-week to close at 97,507.87 points, down from 97,829.02 points the previous week. Key stocks like Seplat (-6.0%), GTCO (-3.0%), and MTN Nigeria (-1.2%) drove the sell-off, while gains in WAPCO (+7.4%), Oando (+6.7%), and FBNH (+3.5%) provided some respite.
Despite the downturn, trading activity remained strong, with trading volume rising by 63.6% week-on-week and value increasing by 52.8% week-on-week. Sectoral performance was mixed: the Oil & Gas Index fell by 1.9%, Consumer Goods by 0.4%, and Banking by 0.3%. Conversely, the Insurance Index rose by 1.2%, and the Industrial Goods Index gained 0.8%.
On a month-on-month basis, the market marginally declined by 0.1%, with investors losing N64 billion as market capitalization closed at N59.207 trillion, down from N59.271 trillion at the end of October. Year-to-date, the market has recorded a 30.4% gain.
Market analysts project a cautious outlook. Cordros Research noted: “This week, we expect cautious trading to persist due to the absence of any significant positive catalyst to boost sentiments.”
