The Nigerian stock market witnessed a strong rebound on Tuesday, as investors welcomed the news of the suspension of the CBN Governor, Mr Godwin Emefiele, by President Bola Tinubu.
President Bola Ahmed Tinubu suspended Mr Godwin Emefiele, CFR, last Friday explaining that it was due to the ongoing investigation of his office and the planned reforms in the financial sector of the economy.
It appears that the market sentiment was boosted by the expectation that the suspension would pave the way for a more transparent and accountable monetary policy, as well as a possible devaluation of the naira to ease the pressure on the exchange rate and inflation.
How the market reacted
The benchmark All-share index soared by 4% or 2,232.58 points to close at 58,163.55 points, while the market capitalization increased by N1.22 trillion or 4% to settle at N31.670 trillion.
- The suspension of the CBN Governor also triggered a rally in the banking sector, as investors anticipated a positive impact on the liquidity and profitability of the banks.
- The NSE Banking Index rose by 6.7% to lead the sectoral performance, followed by the NSE Insurance Index which gained 5.4%.
- The NSE Consumer Goods Index and the NSE Oil and Gas Index also advanced by 4.3% and 3.9%, respectively.
Investors also poured into the market as the value of deals transacted rose 55% compared to the last trading day while the volume of deals also rose by about 106%. Market Turnover was up by about 216%.
Stocks Gain big
The market breadth was positive, as 62 stocks appreciated among which the top 10 gained above 9% on the day.
- The top gainers were Access Corp, GT CO, NASCON, Zenith Bank, and Lasco all of which gained 10% respectively.
- The top losers were Elah Lakes (-10%), John Hold (-10%), Caveraon (-4.6%), Veritas (-4.35%), and Honeywell Flour (-4.29%).
- The All Share Index is 13.49% up year to date as investors continue to react positively to development in the economy.
FUGAZ on a roll: The trio of Access Bank, GTCO, and Zenith Bank are currently up 68%, 33.9%, and 28.3% year to date. UBA and FBNH which make up the FUGAZ are also up 33% and 43% year to date respectively.
Optics
The suspension of the CBN Governor is a major development that could have significant implications for the Nigerian economy and the financial markets.
- Analysts have expressed mixed views on the impact of the suspension, with some arguing that it could create uncertainty and instability in the policy environment, while others opining that it could usher in a new era of reforms and growth.
- The market will continue to monitor the situation closely and react accordingly to any new developments or announcements from the presidency or the CBN.
There was no Emiefiele effect anyway. Remember, there was no trading on , the large volume was expected. It cannot be proven that investors splashed the cash because Emiefiele was removed.
The stocks that accounted for the gain were led by the banks and recall that they posted good Q1 results. The PFAs have got the cash to spend on the market to take positions. The market is on a free drive but it will adjust itself in Q3. So allow the market build enough capacity so that when the downturn comes, we will not go to below Q1 level
Emiefiele never supported the market perhaps that much. Did NGX ever access forex to pay it’s technical partners, i doubt. Instead Emiefiele was a massive manipulator of the market during his days at Zenith Bank. He is well invested in the market. Also, he stalled most of the initiatives of NGX that are dollar dependent. This is aside of his denying genuine.foreign.investors easy repatriation.of their dividends, which was so frustrating.
Emiefiele effect was never a factor. Who Emiefiele hel. Only his cronnies and acolytes.anf himself obviously
Meanwhile, the banks need to stop cheating savers. They should implement the 30 percent on 18.5percent. They declare huge interest incomes on loans and advances while interest paid on savings is meagre. Now the story in the puplic space they were robbing the savers and loan seeks to pay Emiefiele huge pocket money annually. All the board members of those banks should be replaced fast. If the story is true. There is need for critical surgical operation on the banking sector. Emiefiele lacks the fear of God. His personal incomes alone is enough to enable him serve this country without blemish. He was just a wicked man. Hos national honoyrs should be withdrawn along with that of Oscar Onyema. The CBN Examiners should do their work.fsithfully. The structure of interest rate is faulty and punishes long term savers.