NGX: Capital Market Maintained Resilience Despite Multiple CBN Rate Hikes

0
108

The Nigerian Exchange Limited (NGX) says analysis of daily trading data from the exchange revealed that the all-share index (ASI) has returned 14.77 percent year-to-date (YtD).

NGX said this in a statement on Sunday.

According to the statement, the development implies that the capital market has shown “resilience despite three consecutive interest rate hikes by the Central Bank of Nigeria (CBN)”.

NGX said to curb rising inflation amid both local and global headwinds such as spiralling inflation against the backdrop of soaring food prices; higher energy costs due to COVID-19 fallout; Russian-Ukraine-induced supply chain disruptions; and the continued insecurity in the country; “the CBN resorted to raise its overnight monetary policy rate (MPR) after monetary policy committee (MPC) meetings were concluded”.

NGX: Capital Market Maintained Resilience Despite Multiple CBN Rate Hikes

It said CBN has raised interest by 400 basis points in total, but despite this, the market has weathered the storm as listed companies have continued to report strong earnings.

“The Nigerian Exchange Limited (NGX) all-share index (ASI) has returned 14.77 percent year-to-date, analysis of daily trading data from the NGX revealed, showing resilience despite three consecutive interest rate hikes by the Central Bank of Nigeria (CBN),” the statement reads.

“In total, the CBN has raised MPR by 400 basis points (bps) from 11.5 percent predating the 24 May 2022 meeting of the MPC to 15.5 percent as of 27 September 2022. On the back of strong earnings reports from listed companies in the first half of the year and significant confidence elicited by domestic investors, the ASI has weathered the storm of interest rate hikes to remain in 14.77 percent at the end of September.

“Other indices such as the NGX main-board index, NGX AFR Div yield index, NGX growth index and NGX MERI growth index have seen excellent returns YtD at 30.53 percent, 14.98 percent, 38.07 percent, and 20.97 percent respectively.

The NGX oil/gas index was the best performing sectoral index on a YtD basis at 47.63 percent correlating with a general positive performance in oil firms globally amidst high oil prices.”

Source: The Cable