Stock market investors are looking forward to the outcome of the Nigerian apex bank’s Monetary Policy Committee (MPC) meetings, scheduled to be held on Monday and Tuesday.
During its last MPC meeting in February, the Central Bank of Nigeria (CBN) raised its benchmark interest rate, the Monetary Policy Rate (MPR), by 400 basis points from 18.75% to 22.75%.
The meeting’s decision, which will be made public tomorrow, is anticipated to have an impact on investment choices made across a number of the market’s major segments, but mainly the financial industry.
Analysts have emphasized that investor sentiment and confidence in the industry are already being impacted, and this effect has spread to the entire market, due to the delayed certification of banks’ results as it seems the MPC has sacrificed the economy to draw in foreign capital in exchange for better foreign exchange supplies that will aid in resolving FX issues.
The market underperformed last week because of losses in MTN Nigeria, which fell by 12.25% W/W, Dangote Sugar, which fell by 3.67% W/W, and Transcorp, which fell by 0.32% W/W. Buying interests in First Bank Nigeria Holdings, FBNH, which gained 4.46% W/W, UBA, which dropped by 11.11% W/W, and Access Corporation, which gained 4.35% W/W, were outweighed by these losses.
Commenting on the market outlook, analysts at InvestData Consulting Limited quoted by Punch said: “We expect a mixed sentiment and profit taking to continue as players await the release of more corporate earnings with dividend possibility ahead of next MPC meeting, while Investors take advantage of low valuation to position and rebalancing portfolio.
“This is amid the volatility and pullbacks that add more strength to the upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”