By Chinwendu Obienyi and Chukwuma Umeorah
As investors around the globe exit risk assets into safer classes, the Nigerian Exchange Limited (NGX)’s All-Share Index’s 3.56 per cent Year-to-Date (YTD) return shows its strong resilience amid consecutive interest rate hikes by the Central Bank of Nigeria (CBN).
Central banks in the United States of America, Europe, United Kingdom and Nigeria have bumped their overnight lending rates in bids to fight inflationary pressures on their respective economies.
Despite calls from fiscal authorities in the US, the Federal Reserve has stuck to its mandate announcing a further 750 basis point hike in Federal Funds rate, bringing it to 4 per cent this year, its highest since 2008.
Flagship indices like the S&P 500 and the NASDAQ 100 have purged trillions of dollars amidst the Fed’s interest rate hikes and quantitative tightening.
According to Countryeconomy, a tracker of global stock market indices, the S&P 500 has plunged by 21.12 per cent YTD, whilst the NASDAQ 100 plummeted by 32.53 per cent in the same period.
The Dow Jones Industrial index has fallen by 11.53 per cent from January, and the UK’s flagship index, the FTSE 100 lost 6.06 per cent.
Meanwhile, the NGX ASI has managed a positive 3.56 per cent YTD return despite three CBN’s Monetary Policy Rate hikes between May and October, mostly on the back of strong earnings by listed companies.