Nigeria’s equities market on Thursday failed to sustain previous day’s gain as it dropped by 0.42percent or N112billion at the close of trading session. This week, the market has decreased by 0.13 percent, while this month it has declined by 1.75percent.
The recent hike in MPR and CRR are expected to further fuel the bear market as equity investors reallocate funds to the fixed income markets.
After its two-day Monetary Policy Committee (MPC) meeting, the Central Bank of Nigeria (CBN) last Tuesday raised its benchmark interest rate …the Monetary Policy Rate (MPR) to 15.5 percent, the third straight hike this year.
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The CBN also raised the Cash Reserve Ratio (CRR) to 32.5 percent from 27.5 percent. The MPC decision was in consideration of the persistent rise in inflation rate and fragile growth.
At the close of trading session on Thursday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation dropped from preceding day highs of 49,171.7 points and N26.531trillion respectively to 48,964.83 points and N26.419trillion.
Also, the market’s positive return year-to-date (YtD) decreased to +14.63 percent.