The Nigerian stock market experienced a strong rebound on Tuesday following the news of the suspension of the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, by President Bola Tinubu. Here are three key highlights from the news:
Suspension of CBN Governor
President Bola Ahmed Tinubu suspended Mr. Godwin Emefiele, CFR, last Friday, stating that it was due to the ongoing investigation of his office and the planned reforms in the financial sector of the economy. The market sentiment was boosted by the expectation that the suspension would pave the way for a more transparent and accountable monetary policy and a possible devaluation of the naira to ease the pressure on the exchange rate and inflation.
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. Investors also poured into the market, with the value of deals transacted rising by 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, with 62 stocks appreciating, 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 All Share Index is 13.49% up year to date as investors continue to react positively to development in the economy.
The suspension of the CBN Governor is a significant 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. In contrast, others opine 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.