Nigeria’s banking index fell 2.4 percent on Wednesday shortly before the central bank’s first interest rate decision where the MPC decided to hold the benchmark rate at 14 percent as investors grew bearish on equities, traders said.
The drop in banking stocks led the main share index down 0.65 percent to its lowest level in almost three months.
The central bank Monetary Policy Committee (MPC) member unanimously decided to hold the MPR rate.
Most analysts polled had predicted that rates to be kept on hold with cuts due later this year.
The central bank canceled its January meeting due to an inability to form a quorum after several departures reduced it to just five out of 12 members.
Stocks fell for the second straight day on Wednesday as concerns that a trade dispute between the United States and China could create uncertainty for frontier market investors also weighed.
Most Nigerian quoted companies reported strong earnings for 2017 but traders said these had already been priced in.
“There’s some pessimism in the market and investor have priced in 2017 performance into last quarter’s rally,” one trader said.
“If Q1 numbers show strong results then optimism will come back.”
Nigeria’s stock market rose 16 percent in January buoyed by gains in the banking sector as local and foreign investors snapped shares. Profit taking has since eroded some of the gains and stocks are now up 6.8 percent so far.
Twenty-four stocks led the index down on Wednesday with mid-tier lenders FCMB, Skye Bank and Unity Bank falling more than 4 percent each. Unity Bank has said it was in talks to sell a minority stake to two foreign investors to help it recapitalise.
Stocks fell for the second straight day on Wednesday as concerns that a trade dispute between the United States and China could create uncertainty for frontier market investors also weighed.
Most Nigerian quoted companies reported strong earnings for 2017 but traders said these had already been priced in.
“There’s some pessimism in the market and investor have priced in 2017 performance into last quarter’s rally,” one trader said.
“If Q1 numbers show strong results then optimism will come back.”
Nigeria’s stock market rose 16 percent in January buoyed by gains in the banking sector as local and foreign investors snapped shares. Profit taking has since eroded some of the gains and stocks are now up 6.8 percent so far.
Twenty-four stocks led the index down on Wednesday with mid-tier lenders FCMB, Skye Bank and Unity Bank falling more than 4 percent each. Unity Bank has said it was in talks to sell a minority stake to two foreign investors to help it recapitalise.
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