Equities market sheds 0.22% amid cut in interest rate

The Nigerian Stock Exchange (NSE) equities market segment on Thursday halted the long run of successive gains as the All-Share Index (ASI) fell by 0.22 per cent due to profit-taking in high capitalised stocks.

The ASI decreased by 55.22 basis points, representing a dip of 0.22 per cent to close at 25,166.01 basis points. Similarly, the overall market capitalisation size shed N29 billion to close at N13.115 trillion.

Against the foregoing, Month-to-Date return declined to 9.56 per cent, as Year-to-Date losses rose marginally to -6.04per cent.

The equities market performance is coming on the heels of  the one-day virtual policy meeting, the Monetary Policy Committee (MPC) voted to reduce the Monetary Policy Rate (MPR) by 100 basis points to 12.50 per cent and voted to leave other rates unchanged. This is in a bid to salvage the economy from the negative impact of COVID-19 outbreak.

Retain Monetary Policy Rate (MPR) at 12.5 per cent, maintain the asymmetric corridor around the MPR at +200/-500bps, hold Cash Reserves Ratio (CRR) at 27.5 per cent and keep liquidity ratio at 30 per cent.

On a sectoral basis, gains in the Industrial Goods (+0.23per cent) and Insurance (+1.16per cent) indices were not enough to mask losses across the Banking (-2.79per cent), Oil and Gas (-0.63per cent), and Consumer Goods (-0.07per cent) indices.

The downturn in the equities market was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Flour Mills of Nigeria, Ecobank Transnational Incorporated (ETI), Zenith Bank, United Bank for Africa (UBA) and Guaranty Trust Bank.

The market breadth closed slightly negative, with 19 gainers against 18 losers. Cutix recorded the highest price gain of 9.94 per cent, to close at N1.88, per share. May and Baker Nigeria followed with a gain 9.71 per cent to close at N3.39, while Champion Breweries gained 9.64 per cent to close at 91 kobo, per share.

University Press went up by 9.62 per cent to close at N1.14, while Neimeth International Pharmaceuticals rose by 9.57 per cent to close at N1.03, per share. On the other hand, ETI led the losers’ chart by 9.92 per cent, to close at N5.45, per share. Ikeja Hotel followed with a decline of 8.73 per cent to close at N1.15, while UBA shed 6.25 per cent to close at N6.75, per share.

Oando went down by 5.71 per cent to close at N2.64, while Fidelity Bank shed 5.50 per cent to close at N1.89, per share.

Also, the total volume of trades decreased by 40.1 per cent to 348.211 million units, valued at N3.433 billion and exchanged in 7,148 deals. Transactions in the shares of FBN Holdings (FBNH) topped the activity chart with 47.387 million shares valued at N261.941 million. Access Bank followed with 36.869 million shares worth N270.714 million, while Zenith Bank traded 27.416 million shares valued at N478.132 million.

UBA traded 25.015 million shares valued at N174.401 million, while Guaranty Trust Bank transacted 23.490 million shares worth N576.215 million.

Analysts at Afrinvest Limited expected bargain hunting to support market performance in the next trading session.

“The equities market closed negative today on the back of losses recorded in most sectors. While we believe the risk-off sentiment could have caused the recent sell-off in the market, we retain our stance that this may be one of the best periods to pick up some quality names with a medium to long term horizon,” expressed InvestmentOne Research analysts on Thursday.