LAGOS — Financial markets recorded dramatic reversal of fortunes barely 24 hours after a bullish reaction to new monetary policy measures introduced by the Central Bank of Nigeria, CBN.
The apex bank had in its last Monetary Policy Committee, MPC, on Tuesday, effected major cuts in benchmark money rates and the next day stock market bounced back while treasury market bubbled.
However, investors in the stock market, yesterday, reversed their sentiment while trading in bonds took sell-off pressures for profit takings.
Stockbrokers told Vanguard yesterday that “speculative trades pulled stock market back into negative territory with All Shares Index, ASI, of the Nigerian Stock Exchange returning to the dead zone a day after the CBN’s decision to lower rates had propped the benchmark index to end its extended losing streak”.
The volume and value of transactions dipped by 17.53 per cent and 15.53 per cent to close at 167.46 million units and N2.3 billion respectively.
But Traders’ Index inched up to 1.21 per cent from 0.63 per cent, suggesting that market activities may close in positive territory at today’s trading session.
Similarly sell pressure dominated activities in the bond market as investors took profits from previous days’ positions. Hence, yields levels moved upwards to close at 9.8 per cent on average.
Treasury analysts at Greenwich Trust Limited, a Lagos-based investment house, said “at the subsequent trading session, we expect to see sustained sell pressure as investors hold off for more favorable yield levels.”
However, buying momentum lingered in the Treasury Bills market as investors continued taking positions in the market. As a result, yield levels dipped lower by 24 basis points to close at 2.5 per cent on average.
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