Stocks value rise on high in­fla­tion rate

Daily Trust - - BUSINESS - From Kay­ode Ogun­wale, Lagos

In­fla­tion rate has risen above the high point of the Cen­tral Bank of Nige­ria/Mone­tary Pol­icy Com­mit­tee ((CBN/MPC) range of be­tween 6 per cent and 9 per cent year-on-year for four months, with bullish im­pli­ca­tions, stock­bro­kers told the Daily Trust, for stocks.

The stock­bro­kers sub­mit­ted this de­vel­op­ment is driv­ing the stock mar­ket and in­flu­enc­ing in­vestors to di­vert their resources to the cap­i­tal mar­ket.

Ac­cord­ing to the Na­tional Bureau of Statis­tics (NBS) Con­sumer Price In­dex and In­fla­tion Re­port for Septem­ber 2015, in­fla­tion in­creased marginally to 9.4 per cent (year on year), from 9.3 per cent in Au­gust.

The NBC at­trib­uted the faster pace of stock ac­tiv­i­ties in Septem­ber to busi­ness in higher food and non­food di­vi­sions rang­ing from al­co­holic bev­er­age, tobacco and kola, cloth­ing & footwear, to hous­ing, wa­ter, elec­tric­ity, gas and other fu­els di­vi­sions, which it said con­trib­uted to the head­line in­dex. “The Mus­lim hol­i­day pe­riod may have con­trib­uted to higher food prices,” it be­lieved.

The food sub-in­dex as a whole recorded a mar­ginal in­crease by 10.2 per cent (yearon-year) in Septem­ber from 10.1 per cent in Au­gust. Prices rose in ma­jor cat­e­gories as bread and ce­re­als, meat, fish, and oils & fats groups. The fruit, veg­eta­bles, pota­toes, yams and other tu­bers groups have, how­ever, held con­stant or grown at a slower pace for three con­sec­u­tive months, ul­ti­mately weigh­ing on the in­dex.

Some stock­bro­kers be­lieved that the in­crease in in­fla­tion rate is re­spon­si­ble for the sud­den rise in stocks value, which started last Thurs­day with N190 bil­lion gains in the last three trad­ing days.

Stocks had on Thurs­day ap­pre­ci­ated by N11b, surged by N46bn on Fri­day and rose by N133bn yes­ter­day.

When trad­ing closed on Mon­day, ac­tiv­ity as mea­sured by vol­ume and value traded closed with 104.466m shares val­ued at N1.935bn trans­acted in 2,930 deals.

The financial ser­vices sec­tor con­tin­ues to dom­i­nate vol­ume and value, driven by trans­ac­tions in Zenith Bank Plc, which traded 16.680m shares worth N293.742m, fol­lowed by FBN Hold­ings Plc with 14.158m units of shares val­ued at N82.439m, UBA Plc with 6.099m shares at N26.014m and Guar­anty Trust Bank Plc with 5.880m shares worth N139.579m.

Top on the gain­ers log was Dan­gote Ce­ment Plc with a gain of N7.94 kobo to close at N168.95 kobo, fol­lowed by Mo­bil Nige­ria Plc with N6.00 kobo to close at N154.00 kobo from N148.00 kobo it opened the week, UAC of Nige­ria Plc with N0.80 gain to close at N28.85 from N28.050 and La­farge Africa Plc with N0.65 to close at N99.50.

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