•As equities depreciate 0.7%
By Nkiruka Nnorom
Decisions by investors in the nation’s equities market will be dictated by the outcome of the Monetary Policy Committee, MPC, meeting of the Central Bank of Nigeria, CBN, scheduled to hold today and tomorrow.
But analysts are already projecting that the Committee would vote to keep the monetary policy parameters unchanged.
At its last meeting in January, 2021 the Committee retained the Monetary Policy Rate (MPR) at 11.5 percent.
Though it was expected that the decision to hold rates would have retained the uptrend in the stock market, this did not happen due to the uptick in yields in fixed income market, spike in inflation rate and profit taking activities in equities.
Meanwhile, the stock market suffered its seventh consecutive week of losses, resulting in N139 billion loss to investors and 0.7 percent decline in the All Share Index (ASI).
Specifically, the index closed lower at 38,382.89 points, driven by losses in BUA Cement (-6.4%), Nigerian Breweries (-5.3%), and MTN Communication Nigeria (-0.6%).
Also, the market capitalisation of all listed equities declined to N20.082 trillion from N20.221 trillion, representing 0.7 percent decline.
Analysis of sectoral performance was mixed as the banking (+2.1%), and oil and gas (+1.6%) sectors posted gains, while the industrial goods sector (-2.6%) and consumer goods (-1.5%) recorded losses. However, the insurance sector closed flat.
Making a projection into the week, analysts at Cordros Capital, said: “We expect investors’ attention to be focused on the outcome of the MPC meeting as they seek clarity on the direction of yields in the fixed income market.”
Also, analysts at Cowry Asset Management said the market may remain weak as yields in the fixed income market trend upward, “especially for 364-day bill which rose to 7 percent. Hence, we expect investors to use the opportunity to hunt for bargains given the lower re-entry prices.”