As anticipation builds around the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting today, the Nigerian stock market has continued its bullish trend on the Nigerian Exchange Limited (NGX).
The MPC is set to announce the new Monetary Policy Rate (MPR), which serves as a benchmark for financial institutions in determining lending rates.
Analysts are speculating that the CBN may maintain the current rate, given the recent slowdown in inflation.
Last week, the NGX All-Share Index (ASI) rose by 0.8%, closing at 98,247.99 points, compared to 97,456.62 points from the previous week. Additionally, market capitalization increased by ₦455 billion, ending the week at ₦56.466 trillion, up from ₦56.001 trillion.
Key stocks contributed to the market’s upward movement, with Geregu Power seeing a 15.00% gain week-on-week (WoW), followed by Fidelity Bank (4.20%) and MTN Nigeria (3.95%).
Commenting on the MPC meeting, analysts at Cordros Research noted that, like in previous meetings, the committee would likely review both global and domestic economic conditions. Globally, central banks are easing monetary policies as inflation approaches targeted levels. Domestically, Nigeria’s GDP growth remains robust, and inflation has decelerated for two consecutive months.
However, short-term challenges remain, particularly with the significant rise in petrol prices by 50.5%, now at ₦855 per litre. Additionally, the CBN has been working to stabilize the naira amidst ongoing demand pressures.
Given these factors, Cordros Research expects the CBN to take a cautious approach, most likely maintaining the current MPR at 26.25% to promote economic stability.
On market projections, InvestData Consulting analysts expect mixed sentiments to persist as investors continue to adjust their portfolios ahead of the third-quarter earnings season.
They predict a combination of profit-taking and bargain-hunting, as well as inflows from half-year interim dividend stocks.
Investors are expected to capitalize on market pullbacks, enhancing the upside potential amidst ongoing volatility and sector rotation strategies.
