Emmanuel OchayiThe Nigerian stock market closed lower on Thursday, shedding 0.04 percent as investors reacted to the Monetary Policy Committee (MPC) decision to keep benchmark interest rates unchanged.
Market Reacts to MPC Decision
After a two-day meeting, the MPC announced that it would retain the Monetary Policy Rate (MPR) at 27.50 percent. It also kept the asymmetric corridor around the MPR at +500 basis points and -100 basis points. The Cash Reserve Ratio (CRR) for deposit money banks was left at 50 percent, while the CRR for merchant banks remained at 16 percent. The liquidity ratio was maintained at 30 percent.
Join our WhatsApp ChannelREAD ALSO: Nigeria’s Stock Market Declines By 0.11% As Investors Await Inflation Report, MPC Meeting
Investors had been looking for signals that the central bank might adjust rates to stimulate economic activity, but the decision to hold rates steady influenced market sentiment.
Stock Market Performance
At the close of trading on Thursday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) dropped from the previous day’s 108,609.51 points to 108,568.5 points. Similarly, the market capitalization fell from N67.684 trillion to N67.658 trillion, reflecting a decline in investor confidence.
Union Dicon led the day’s top losers, with its share price dropping from N6.65 to N6, marking a loss of 9.77 percent. CWG also saw a decline, losing 50 kobo, as its price fell from N8.70 to N8.20. Ikeja Hotel’s stock price decreased from N12.60 to N11.90, representing a 5.56 percent drop.
Tantalizers was also among the declining stocks, as its share price fell from N2.05 to N1.95, shedding 4.88 percent.
Trading Volume and Active Stocks
Despite the drop in the stock market, several stocks saw strong trading activity. Ellah Lakes, Zenith Bank, GTCO, Jaiz Bank, and UBA were among the most actively traded stocks. Investors carried out 13,269 transactions, exchanging 421,256,435 shares worth N8.424 billion.
Market Outlook
The decision by the MPC to retain key interest rates suggests a cautious approach to monetary policy. Analysts believe that the stock market may continue to experience fluctuations as investors digest the impact of the central bank’s decision.
While some investors may remain on the sidelines, others could see the current market decline as an opportunity to buy stocks at lower prices. The coming weeks will reveal whether the market can regain momentum or if further adjustments will be needed to restore investor confidence.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
