27.2 C
Lagos
Saturday, December 10, 2022

Nigerian Stocks Rally, Bonds Flat as Investors Focus on Rate Outlook

Must read

Listen now
- Advertisement -
- Advertisement -

Nigerian stocks rallied and bonds were largely unchanged on Wednesday as investors adjusted their expectations in response to the Central Bank of Nigeria (CBN) indicating it will continue to raise interest rates but open to slowing the tempo of tightening.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) hiked its Monetary Policy Rate (MPR) by 100 basis points to 16.5 percent on Tuesday.

“The previous hike decisions are beginning to yield results, as seen by the deceleration of inflation on a month to month basis,” CBN Governor Godwin Emefiele, said at a press briefing at the end of the MPC meeting.

The NGX All Share Index (ASI) rose by 2.89% as equity investors cheered an end in sight for the rate hikes.

Bullish sentiment for industrials including Dangote Cement (+9.98%) and BUA Cement (+9.72%) boosted sentiment during the trading session.

Financials also rallied, with the Insurance and banking index up 3.66% and 1.82% respectfully. Bonds marked time as yields were flat to up on the MPC news.

Benchmark 10-year bonds due JAN 2026, were flat at a yield of 14.28%. The longer dated 20-year yielded 14.60%.

Analysts say bond traders are weighing the option of betting on a peak and reversal in yields due to the tightening phase coming to an end, which should see bond prices start to rise.

- Advertisement -
- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article