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Sell-off in shares of Unilever, Access, UBA, and others drag down equity market by N15 bln

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By Ifeyinwa Ezeokoli 

The Nigerian equities market on Tuesday reversed the prior day’s gains, closing lower by N15 billion as investors sold off shares in Unilever, Access Corporation, United Bank for Africa, and other equities.

The renewed market rout on the local bourse followed the Monetary Policy Committee’s (MPC) hike in the Monetary Policy Rate (MPR) by 150 basis points (bps) to a 20-year high of 15.50 per cent. 

Market analysts noted that the latest rate rise would exacerbate the existing gloomy sentiment on the Exchange, as rising fixed income rates would make the equity market less appealing to investors.

The President of the Association of the Capital Market Academics of Nigeria, Uche Uwaleke said the decision by the MPC to further tighten monetary policy was justified by the need to tame inflationary and forex pressures.

Uwaleke added that the decision would possibly stem capital outflows on account of the hike in policy rates in developed economies, especially in the US and UK. 

The primary mandate of the CBN is to maintain price stability.

“But, it has grave implications for cost of capital for firms, cost of borrowing by the government, stock market performance and output growth in general. 

“It may also affect the asset quality of banks as they reprice their loans in response to the hike in MPR,” he said.

As a result, the All Share Index (ASI) decreased by 27.87 points or 0.06 per cent to close at 49,161.45 points. 

Consequently, the month-to-date loss increased to -1.4 per cent, while the year-to-date gain moderated to +15.1 per cent.

Similarly, the market capitalisation lost N15 billion to close at N26.517 trillion.

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The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Vitafoam Nigeria, Unilever Nigeria, Access Holdings, May & Baker Nigeria and GlaxoSmithKline Consumer Nigeria.

Also, market breadth closed negative with 17 losers versus 14 gainers. 

May & Baker Nigeria led the losers’ chart in percentage terms by 9.79 per cent to close at N3.50 per share.

Regency Alliance Insurance followed with 7.69 per cent to close at 24k, while Vitafoam Nigeria went down by 6.98 to close at N20 per share. 

Unilever Nigeria lost 5.38 per cent to close at N12.30, while GlaxoSmithKline Consumer Nigeria shed 5.08 per cent to close at N5.60 per share.

On the other hand, Multiverse Mining and Exploration and Nigerian Exchange Group (NGX Group) led the gainers’ chart in percentage terms by 10 per cent each to close at N3.41 and N19.80 per share, respectively.

 Eterna followed with 9.91 per cent to close at N6.32 per share.

Courteville Business Solutions went up by 8.89 per cent to close at 49k, while Champion Breweries appreciated by 8.53 per cent to close at N3.69 per share. 

However, the total volume traded rose by 16.73 per cent to 206.21 million shares, worth N2.36 billion traded in 3,777 deals. 

Transcorp topped the activity chart with 38.46 million shares valued at N38.99 million. 

Zenith Bank followed with 35.27 million shares worth N710.833 million, while FCMB Group traded 30.19 million shares valued at N105.61 billion.

Vitafoam Nigeria traded 18.13 million shares valued at N362.77 million, while  Linkage Assurance transacted 8.89 million shares worth N4.18 million.

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