Geregu, Dangote Cement, BUA, Transcorp Shield Market Amid Rate Hike

Geregu, Dangote Cement, BUA, Transcorp Shield Market Amid Rate Hike

Despite the Central Bank of Nigeria’s (CBN) significant interest rate hike last month, the Nigerian stock market has shown resilience, buoyed by shares of companies associated with four Nigerian billionaire businessmen……READ ALSO Dangote Cement: Plans To Increase 50% Shareholder Dividends Amid Rising Cement Prices

In the first Monetary Policy Committee meeting under Governor Olayemi Cardoso, the CBN raised the monetary policy rate (MPR) by 400 basis points to 22.75%, a move expected to divert investments away from equities.

However, the equities market defied bearish sentiments, with buy interest driven by the recent listing of Transcorp Power stocks by introduction. Transcorp Power’s listing of 7.5 billion ordinary shares on the Nigerian Exchange Limited (NGX) at N240 per share significantly boosted market capitalization.

Among the stocks that helped the market resist the impact of the rate hike are:

• Geregu Power: Up by 150.6% year-to-date.
• Dangote Cement: Up by 114.7% year-to-date.
• Transnational Corporation of Nigeria: Up by 72.1% year-to-date.
• Transcorp Power: Up by 59.6% year-to-date.
• BUA Foods: Up by 96.4% year-to-date.
• FBN Holdings: Up by 60.5% year-to-date.
• BUA Cement: Up by 47.6% year-to-date.

Femi Otedola’s involvement in shares of Dangote Cement and Transcorp significantly influenced their prices. Otedola, also the chairman of Geregu Power, emphasized long-term wealth preservation and shareholder value in his Dangote Cement share acquisition.

Other stocks outperforming the market benchmark index include Tripple G (+92.1%), Seplat Energy (+45.9%), Meyer (+56%), Wema Bank (+48.2%), and PZ Cussons (+49.8%) this year.

Despite inflationary pressures, Cardoso stressed the MPC’s adoption of an assertive stance by tightening monetary policy measures, aiming for a medium-term inflation target of 21.40% by the end of 2024.

As of March 21, the NGX ASI and equities market capitalization increased to 104,387.47 points and N59.021 trillion, respectively, from preceding trading day’s lows. The February 2024 Consumer Price Index report by the National Bureau of Statistics showed headline inflation at 31.70% year-on-year compared to 21.91% in February 2023.