Stock market drops as new CBN rule hits banking shares
The Nigerian stock market faced a significant downturn after investors reacted to new Central Bank of Nigeria guidelines on banks’ foreign subsidiaries. The market lost N1.92 trillion, with banking and cement stocks seeing major sell-offs. Tajudeen Olayinka, an investment banker, explained that the CBN’s directive limits banks’ investments in foreign subsidiaries to 10 per cent of their equity capital. Despite the losses, he believes the affected banks remain fundamentally strong.
TLDR
- Investors lost N1.92 trillion as market capitalisation dropped from N155.780 trillion to N153.858 trillion.
- The All-Share Index fell by 1.23 per cent, closing at 239,734.61.
- The CBN guideline compels banks to limit foreign subsidiary investments to 10 per cent of their equity capital or shareholders’ funds.
- Heavy repricing of international banking stocks also affected cement companies and other highly capitalised equities.
- Market activity improved, with traded volume rising by 29.34 per cent to 1.83 billion shares worth N72.17 billion.
