Investors in the Nigerian stock market lost over N1.5 trillion of their investment in the stock market over new monetary policy.
The Central Bank of Nigeria, CBN’s Monetary Policy Rate, MPR, at the Monetary Policy Committee, MPC, meeting yesterday increased the MPR by unprecedented 400 basis points to an equally unprecedented MPR height of 22.75 percent from 18.75 percent at the meeting.
The NGX market capitalisation, which represents the total value of investment on the Nigerian Exchange Limited, NGX, dropped from N55.810 trillion recorded on Monday to N54.317 trillion at the close of trading on Wednesday.
After the CBN governor announced the new MPR on Tuesday, the stock market went down with investors’ losing about N773 billion and on Wednesday it dropped further by N720 billion.
Another major stock market gauge, NGX All Share Index, ASI, declined for the two consecutive days by 2.7 percent to close at 99,266.02 points from 101,995.53 points it closed on Monday.
Trading survey howed that the NGX ASI declined on Tuesday and Wednesday by 1.4 % and 1.3% individual.
Market scheme showed trade yield settled lower relative to the previous session, with the value of transactions down by 4.8 percent. A total of 396.23million shares valued at N5.83billion were exchanged in 10,549 deals.
Analysts attributed the bearish trend to selloffs in highly priced stocks and profit taking in blue chip companies that weighed on the benchmark NGX All Share index which closed lower, as the market reacted immediately to the 4% increase in MPR.
To the development growth: Analysts at Invest data noted: “This position did not come as a surprise to many, thus, since Olayemi Cardoso, the new CBN Governor, had signaled this since November 2023, coupled with the failure to hold a policy meeting for so long a time, with inflation rate climbing to almost 28-year high at 29.9%. It is also the highest since Nigeria returned to democracy in May 1999, while the Naira decreased is hitting almost 70% against dollar in the New Year 2024.”
