CBN policies push NGX’s investors to lose N3.57tn in April

The Nigerian Exchange Market Limited investors lost N3.57 trillion in market value in April as the All-Share Index experienced a significant decline amid the Central Bank of Nigeria’s recent banks’ recapitalization policy.

This downturn represents the first monthly decline for the NGX this year, contrasting with gains of 17.7 per cent, 12.47 per cent, and 5.64 per cent recorded in January, February, and March respectively. Despite this setback, the NGX is still up by 31.36 per cent year-to-date.

Several policy announcements from CBN influenced the sharp drop in the index.

Recall that on April 2, 2024, CBN, announced a new recapitalization plan for commercial banks, aiming to raise an estimated N4 trillion in fresh capital over the next two years.

Further exacerbating the market’s reaction was the decision by the CBN’s Monetary Policy Committee to raise the benchmark interest rate by 200 basis points, moving from 22.75 per cent to 24.75 per cent.

These policies driven by the apex bank, including the rate hike, have significantly led to intensified sell-offs, resulting in a 6 per cent decline in the local bourse, with the benchmark index closing at 98,225.63 points.

Accordingly, the NGX All-Share Index fell below the 100,000-point threshold, finishing the day at 98,225.63 points, a stark contrast to its peak of 104,562.06 points at the end of March 2024.