Days after the suspension of Godwin Emefiele as the governor of the Central Bank of Nigeria (CBN), Nigerian stock market on Tuesday, surged to its highest level since July 2008, the first trading day since his suspension.
Gatekeepers News reports that some market analysts have speculated that the surge is linked with investors’ optimism that the suspension of the CBN governor is a signal of coming monetary policy reforms.
According to Bloomberg, the main index of the Nigerian Exchange Limited (NGX) rose 2.7 percent to above 57,437 points, taking the year-to-date gains of the market to 11.8 percent, almost double the six percent return on the MSCI index.
In reaction to this, the Head of Research at Chapel Hill Denham, Tajudeen Ibrahim, said the rally is a reflection of optimism over the policy signals from the president.
Ibrahim told Bloomberg, “An improvement in the economy will enhance the performance of companies operating in the market.”
Meanwhile, the NGX Banking Index soared 8.5 percent to 570.64, the biggest advance in more than eight years.
Ibrahim added that, “The exchange rate convergence is expected to lead to improvement in liquidity in the foreign currency market and will increase trading activities for the banks.”
Last Friday, Gatekeepers News reported that President Bola Tinubu suspended Emefiele and directed him to transfers his responsibilities to the deputy governor, operations directorate.
The Deputy Governor, Folashodun Shonubi is expected to act as the CBN governor pending the conclusion of an investigation ordered by the president into Emefiele’s activities.
The Department of State Services (DSS) later announced that Emefiele is currently in its custody for “some investigative reasons”.
