At the normative level, there is negative correlation between an increase in the nominal anchor, popularly called Monetary Policy Rate and equity prices in the stock market. When there is an increase in the MPR, speculators hit the panic button, dump their shares and move the money to the market to take advantage of…At the normative level, there is negative correlation between an increase in the nominal anchor, popularly called Monetary Policy Rate and equity prices in the stock market.
At the moment, the permutation is that whoever emerges victorious among the three top contenders will be pro-market and operate a private sector-led economy. These and other issues cut across the manifesto of each of the three leading aspirants. As at the period of this writing, NGX is on bullish trend. By the recent development, the market has signaled that a change in MPR does not automatically translate to negative correlation in equity investment.
The global rating agency, Moody’s Investors Service, has downgraded Nigeria’s rating from B3 to junk bonds and also issued red flags to nine Nigerian banks- Access Bank Plc, Zenith Bank, First Bank of Nigeria Limited, Guaranty Trust Bank, First City Monument Bank and Sterling Bank. External reserve has declined by $ 64 million from $37.08bn to $37.01bn at the end of January 30, 2023.
It is the opposite of buy-and -hold investment strategy. Professionals that deploy market timing use tools like chart analysis, trend analysis, economic forecasts and even gut feelings to determine the optimal time for transaction.