The adoption of a flexible foreign exchange rate regime and retention of Monetary Policy Rate, MPR, at 12 per cent will boost investment in stocks, analysts have said.
The Monetary Policy Committee, MPC, of the Central Bank of Nigeria, CBN, decided on Wednesday to maintain the MPR, Cash Reserve Requirement, CRR and Liquidity Ratio, LR at 12 per cent, 22.5 per cent and 30 per cent respectively.
The Managing Director of APT Securities Limited, Alhaji Garba Kurufi noted that considering current inflation rate of 13.72 per cent, investors will prefer investment in stocks than money market instruments.
He said, “Some people investment in bonds at 12 per cent couple but the inflation rate is now higher than the interest rate, so investment in stocks is better.”
Also, analysts at FSDH Merchant Bank Limited noted that trading in equities advanced on the Nigerian Stock Exchange yesterday on the retention of MPR at 12 per cent.
The All Share Index appreciated 0.80 per cent to close at 27,231.50 points, while market capitalisation gained N74 billion to close at N9.35 trillion.
The appreciation recorded in the share prices of ETI, Transcorp, Access Bank, Nigerian Breweries and Dangote Cement were mainly responsible for the gain recorded.
The total value of stocks traded was N1.54billion, down 19.40 per cent from N1.91billion recorded the preceding day.
The total volume of stocks traded was 274.21million in 4,160deals, while the three most actively traded stocks were FBN Holdings, United Capital and Access Bank.
Vitafoam Plc led the gainers’ table with 30 kobo or 6.98 per cent to close at N4.60 per share, followed by NAHCO Plc with 22 kobo or 4.82 per cent to close at N4.78 per share.
Fidson Healthcare Plc appreciated 10 kobo or 4.76 per cent to close at N2.20 per share, while NPF Microfiance Bank Plc added five kobo or 4.59 per cent to close at N1.14 per share.
Conversely, Learn Africa Plc shed eight kobo or 9.41 per cent to close at 77 kobo per share, while Cap Plc lost N2.00 or five per cent to close at N38.00 per share.
Cadbury Nigeria Plc declined 86 kobo or 4.99 per cent to close at N16.38 per share, while Union Dicon Salt Plc fell 62 kobo or 4.95 per cent to close at N11.90 per share.