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.
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.
Download Nairametrics App for breaking news and market intelligence.