NSE LIVE! Equities lose N141bn as CBN holds interest rate high

The recent downtrend at the Nigerian equities market continued on Tuesday with a net capital loss of N141 billion as the Central Bank of Nigeria (CBN) decided to hold the benchmark interest rate and monetary management rates at their current levels.

The Monetary Policy Committee (MPC) of the apex bank on Tuesday rounded off its two-day meeting with a decision to retain key rates at their existing levels. The Monetary Policy Rate (MPR) was retained at 14.0 per cent; the Cash Reserve Ratio at 22.5 per cent, Liquidity Ratio at 30.0 per cent while the asymmetric corridor around the MPR was retained at +200 and -500.

““With the MPC voting to keep interest rates steady, we do not expect to see any major impact on the equities market,” Afrinvest Securities-a Lagos-based dealer at the NSE stated.

A cut in the benchmark interest rate and improved liquidity could have enhanced the attraction of the equities and help to stimulate a rally. Without any major immediate major mediating factor, quoted equities remained under profit-taking pressure as investors realign their portfolios ahead of the third quarter earnings.

Benchmark indices at the Nigerian Stock Exchange (NSE) indicated average day-on-day decline of 1.15 per cent, equivalent to net capital loss of N141 billion. This depressed the average year-to-date return to 30.05 per cent.

Aggregate market value of all quoted equities declined from its opening value of N12.189 trillion to close at N12.048 trillion. The All Share Index (ASI)-the value-based common index that tracks share prices, also declined simultaneously from its opening index of 35,358.73 points to close at 34,951.27 points.

The negative overall market position was driven by widespread sell sentiment, especially within the influential large-cap stocks in the industrial goods and consumer goods sectors. The NSE Industrial Goods Index dropped by 1.7 per cent while the NSE Consumer Goods Index declined by 0.9 per cent. However, the NSE Oil & Gas Index appreciated by 0.4 per cent. The NSE Insurance Index inched up by 0.2 per cent while the NSE Banking Index rose slightly by 0.1 per cent.

There were 19 decliners against 16 advancers. Nestle Nigeria-the highest-priced stock at the Exchange, led the decliners with a loss of N19.70 to close at N1, 205.30. Dangote Cement-the most capitalised quoted company, followed with a drop of N7 to close at N206. International Breweries lost N1.87 to close at N35.68. Nigerian Breweries-the second most capitalised quoted company, declined by N1 to close at N167.

Dangote Sugar Refinery lost 10 kobo to close at N13.70 per share. Champion Breweries dropped by 9.0 kobo to close at N2.21 while Continental Reinsurance slipped by 6.0 kobo to close at N1.50 per share.

On the upside, Presco led the advancers with a gain of N1.94 to close at N59. Nascon Allied Industries followed with a gain of 60 kobo to close at N13.10. Oando and Unilever Nigeria added 19 kobo to close at N5.99 and N44.29 respectively. Zenith Bank rose by 11 kobo to close at N22.12. Guaranty Trust Bank chalked up 10 kobo to close at N39.60 per share while AXA Mansard Insurance and Honeywell Flour Mills added 9.0 kobo each to close at N2 and N2.04 respectively.

The momentum of activities however improved considerably as total turnover rose above average to 500.29 million shares valued at N3.62 billion in 3,120 deals. The three most active stocks were Continental Reinsurance, 190.51 million shares; Sterling Bank, 83.31 million shares and Access Bank, with 50.98 million shares.

Market analysts remained optimistic of imminent rebound in share prices as companies prepare to file in their third quarter results.

“We advise investors to stay bullish on stocks with sound fundamentals ahead of third quarter 2017 earnings releases,” Afrinvest Securities stated.

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