Equities Market Edges Lower Ahead of Benchmark Interest Rate Announcement

Nigeria’s equities market opened the new trading week slightly bearish as investor focus shifted to the outcome of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting, which began Monday in Abuja.

At the close of trading on the Nigerian Exchange Limited (NGX), the All-Share Index (ASI) declined by 12.54 points or 0.01% to 109,697.83 from the previous close of 109,710.37.

Market Capitalisation dropped by ₦8 billion to settle at ₦68.945 trillion from Friday’s ₦68.953 trillion, indicating restrained market activity amid growing macroeconomic caution.

The subdued performance reflects investor positioning ahead of the 300th MPC meeting, where analysts broadly expect the CBN to retain the benchmark interest rate at 27.5%.

With inflationary pressures remaining elevated and the local currency still under pressure, market watchers anticipate a cautious approach by the apex bank.

“Looking forward, the equities market will be relatively dovish this week. On one side, investor expectation of the MPC action on Tuesday will make the equities market quiet at the start of the week,” analysts at United Capital stated in a note on Monday.

They further observed that the Nigerian Treasury Bills (NT-Bills) auction slated for mid-week may divert investor interest from the equities space to fixed-income securities.

Futureview Research also noted in its weekly market outlook that the market is likely to see mixed performance. “We expect a mixed performance in the equities market this week, with slight bearish sentiment driven by anticipated profit-taking,” the firm said.

They added that undervalued stocks could provide limited support, even as most investors wait for clearer monetary policy signals.

The market breadth closed negative, with 23 laggards outweighing 21 gainers. The Initiates Plc recorded the highest loss, falling 10% to close at ₦6.12 from ₦6.80. On the gainers’ table, Beta Glass advanced 9.98%, rising from ₦235.05 to ₦258.50.

A total of 486.09 million shares valued at ₦11.38 billion were exchanged in 24,883 deals. Market activity remained concentrated on key banking and industrial stocks, with Access Holdings, Fidelity Bank, GTCO, Cutix and UBA among the most actively traded equities.

Analysts maintain that the market’s direction this week will be shaped by outcomes from both the MPC meeting and the NT-Bills auction.

Any significant change in interest rate posture or liquidity dynamics could trigger investor rotation between asset classes.

“Barring any tangible inflows, anticipated system deficit might decline buy-interest in the equities market. Nevertheless, there might be some pockets of buying activities arising from filing of impressive Q1-2025 results,” United Capital added.

With the CBN’s rate decision expected on Tuesday, institutional and retail investors are likely to remain cautious, balancing opportunities for intra-day gains against macroeconomic uncertainties.