In February, Nigeria’s listed equities rose by N2.5 billion, with a 3.18 percent increase in the NGX ASI. Positive investor interest in industrial and consumer goods stocks contrasted declining sectors like oil & gas and banking. Notably, the MPC maintained the Monetary Policy Rate, fostering a cautious optimism as earnings season commences.
In February, Nigeria’s listed equities experienced a rise of approximately N2.5 billion, reflecting a 3.18 percent increase amid fluctuating trading sessions characterized by both bargain hunting and profit-taking. This growth was supported by investments in industrial, consumer goods, and insurance stocks, despite declines in the oil & gas and banking sectors.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) climbed from 104,496.12 points to 107,821.39 points, with the market capitalization increasing from N64.708 trillion to N67.193 trillion by the trading month’s conclusion on February 28. Additionally, heightened buying activity was observed due to Zenith Bank Plc’s hybrid offer related to a rights issue and public offer, further contributing to positive market sentiment.
Despite significant market volatility during the month, the NGX ASI maintained its upward trajectory as investors focused on stocks with robust fundamentals. The year-to-date return for the market stood at 4.76 percent. Concurrently, the National Bureau of Statistics (NBS) reported a decline in Nigeria’s headline inflation rate to 24.48 percent for January, down from 34.80 percent in December 2024.
Following its 299th monetary policy meeting, the Monetary Policy Committee (MPC) opted to sustain the Monetary Policy Rate (MPR) at 27.50 percent while maintaining the asymmetric corridor at +500 basis points and -100 basis points. The Cash Reserve Ratio (CRR) for deposit money banks remained unchanged at 50 percent, with merchant banks retaining their CRR at 16 percent and a liquidity ratio of 30 percent.
Analysts from Meristem research projected that the MPC’s decision to maintain the monetary policy stance could bolster positive sentiment toward equity assets. They anticipate increased buying interest as the earnings season progresses, with expectations of outpacing selling pressures as investors prepare for full-year results and dividend declarations from companies.
In the final trading week leading to February 28, Nigeria’s equities market saw a decrease of 0.62 percent due to selling pressure on banking, insurance, and oil & gas stocks, resulting in the market closing in negative territory as dip buyers did not intervene effectively.
In summary, February was a period of mixed trading for Nigeria’s stock market, marked by an overall rise in equity value alongside specific sector declines. The NGX ASI demonstrated resilience with gains driven by select investment areas, although external economic factors, such as inflation rates and monetary policy decisions, played significant roles in shaping market dynamics. The overall environment suggests cautious optimism as earnings season unfolds, potentially leading to increased market activity.
Original Source: businessday.ng
