Nigerian stock rally loses steam after bumper rate hike
The rally in the Nigerian stock market has hit a speed bump after two straight hikes in interest rates by the central bank to tame inflation.
The monetary policy rate, also known as the benchmark interest rate, has been increased by 600 basis points this year to 24.75 percent.
Since last week when the central bank raised borrowing costs by 200 basis points, the stock market has suffered declines.
The all-share index and market capitalisation of the Nigerian Exchange Limited fell by 1.08% and 1.05% to close at 103,437.67 and N58.498 trillion respectively on Friday.
All other indices finished lower with the exception of NGX Consumer Goods and NGX Growth, which appreciated by 0.94% and 0.32% respectively while the NGX ASeM and NGX Oil and Gas indices closed flat.
Thirty-one equities appreciated in price during the week as against 40 in the previous week; 42 equities depreciated compared to 31 in the previous week, and 81 equities remained unchanged, lower than 83 in the previous week.
A total turnover of 3.680 billion shares worth N57.892 billion in 40,726 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.804 billion shares valued at N52.040 that exchanged hands last week in 38,550 deals.
The financial services industry (measured by volume) led the activity chart with 2.881 billion shares valued at N46.201 billion traded in 21,257 deals; thus contributing 78.29% and 79.81% to the total equity turnover volume and value respectively. The services industry followed with 479.156 million shares worth N2.282 billion in 2,142 deals. The third place was occupied by the conglomerates industry, with a turnover of 123.591 million shares worth N1.651 billion in 2,849 deals.
Trading in the top three equities namely Abbey Mortgage Bank Plc, Tourist Company of Nigeria Plc and Zenith Bank Plc (measured by volume) accounted for 2.175 billion shares worth N20.667 billion in 2,594 deals, contributing 59.10% and 35.70% to the total equity turnover volume and value respectively.
