How Emefiele’s Arrest Made Nigerian Stocks to Rise 4% After 15 Years of Trials

Nigerian stocks hit their highest level since 9 June 2008 on Tuesday, with the benchmark index surging by 4% as a result of the arrest of the central bank governor, Godwin Emefiele, over the weekend.

The new development raised hopes that the market's required liquidity would soon return.

Following the suspension, the number of transactions doubled compared to the previous days when the CBN Governor was still in power, owing to substantially better risk tolerance.

Godwin Emefiele's arrest influenced the stock market, as his harsh policies kept many investors far from the market for years.

The strong trade seen in the market on Tuesday showed the deeper confidence seen across markets following Godwin Emefiele's arrest, with Nigeria's dollar bonds reaching their highest level this year on Monday.

“We expect the prevailing positive sentiments to stir up further buy-interests in anticipation of the H1-2023 earning season. On the other hand, profit-taking activities will weigh on the bourse’s performance, as investors seek to book their gains off profitable counters,” said analysts at United Capital.

“For equity-vested fund managers and investors, we recommend bargain-hunting exercises across fundamentally sound stocks with improved or relatively cheap valuations,” they added.

Market breadth, an index of investor feelings towards trade, was favourable, with 61 gainers and 14 decliners stated.

The all-share index increased by 2,232.6 basis points to 58,163.6, while market capitalization increased to N31.7 trillion. The index has returned 13.5% so far this year.

An Overview of Top 5 Gainers and Losers Following CBN Governor Arrest

The Top 5 Gainers

NASCON gained 10% and finished at N17.05. Access Holdings gained 10% and finished at N14.30. GTCO gained 10% and finished at N30.80. Lasaco gained by 10% and finished at N1.98. and Zenith Bank finished out of the top five, gaining 10% and closing at N30.80.

The Top 5 Losers

John Holt led the losers, falling 10% and closing at N1.26. Ellah Lakes fell 10% to close at N3.60. The Initiates fell 9.62% to close at N0.47. Caverton fell to N1.24 to close at 4.62%. While Veritas Kapital closed the day at N0.22, with a 4.35% fall.