Excess liquidity, thinning money market margins to sustain bullish stock

•As investors ignore negative GDP

By Nkiruka Nnorom

Investment analysts have said that the stock market will witness yet another week of buy pressure following the increased system liquidity that has seen the inflow of funds to equities. There is also the factor of thinning margins in the money market segment.

They stated that the Monetary Policy Committee (MPC) decision to hold rates would continue to favour equities.

Early last week, the Central Bank of Nigeria (CBN) auctioned N150.6 billion worth of Treasury Bills (TBs) with yields on 364-Day tenor trending as low as 0.02 percent, a development investment experts said would continue to spur sustained bullish bias for equities.

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As a result of the unimpressive yield in fixed income space, the equities market remained resilient last week despite the nation’s official entry to recession, the second in four years.

Consequently, the local bourse recorded gains in four of the five trading days with the benchmark index – All Share Index (ASI) rising by 2.2 percent to 34,885.51 points.

Similarly, the market capitalisation rose by 2.2 percent or N39 billion to close N18.228 trillion.

However, activity levels were weak, as volume and value traded plunged by 84.1 percent and 28.1 percent week-on-week (w/w) to 1.816 billion units and N25.791 billion respectively.

Vanguard News Nigeria

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