This is a concern for the average Nigerian, but a positive for... https://twitter.com/knightofdelta/status/1300563681269481473

I read through this guideline and one thing I can deduce is;
This is a clear WIN for the BANKS and a few other select sectors(CONSUMER GOODS and INDUSTRIAL/MANUFACTURING companies)
From an investing perspective, it should pay to Hold on to ur banking stocks and where u can, seek

to accumulate more as prices visit ur comfort zone. Why? ...a brief:
On banks;
In recent times, there has been a surge in idle Naira placement in banks, no thanks to the current scarce alternative investment outlets. With yields down and even more funds now chasing it(post the

CBN' recent guide on OMO and the FI market space), most banks have had to keep up with so much cash.
The recent corona-induced lock down may have also contributed to the surge in deposit as funds idle out on the aftermath of lower economic activities, particularly imports.

At some point, it was even said that some 1st tier banks were rejecting some deposits.
In retrospect, the surge in idle naira from accelerating deposit pool has had to force banks to lend more in lieu of the apex banks guide on LDR.
With the CBN' mandate to loan out 65k for every

N1 of deposit, it was clear that the more money the banks received, the greater the need to lend !!(balancing LDR in view)
A banker friend once told me that the recent spate of LDR guide has made them(banks) familiar with that part of the song

"the more money we come accross, the more problems we see" by Notorious B.I.G
Hence, the need for this policy to help ease that pressure on lending(loans) that comes with higher deposits while simultaneously allowing for the increased flow of funds in search of better

interest-attached yield, to the real sector.
And the likely impact on banks? A possible contraction in interest expense from lower CoF, which should broadly abate the downside risk on interest income and keep NIM on track. Again, this move will also help keep NPL in check by

easing the possible carrying risk of increased asset deterioration that could come with a higher deposit base.
Little wonder why the banks did prefer to sterilize their funds with the CBN than give in to the pressure of issuing out unworthy loans before now.

In my view, increased lending to the real sector should be the result of a careful asset selection and proper risk management framework and not the pressure of a balancing-out effect on LDR while keeping up with an accelerating deposit pool.
So this move is a positive for banks

...particularly those whose present earnings power is largely loan-driven than investment-driven, but with a relatively healthy loan book.
Looking at the possible WINNERS, I love ZENITH, GTB, ACCESS, UBA, FCMB and FIDELITY !!

On consumer goods;
Well, u do not need a soothsayer to tell u that this is not the best of times to leave ur funds idling out in the bank. That has never been a good idea anyway(think through the mix of inflation and battered rates)
This move further diminishes ur savings power.

...at the moment, it looks like the cost of saving can well take a bite off ur purchasing power at a faster pace(3x) than before. Put differently, u just might be better-off spending that Naira note than stocking it up in the bank.
There are 2 options;
Its either u Work with it

by spending it or allow it work for u through investing.
That part about spending will in time help spur consumption and support production. . And as more companies benefit from this, the more their prospect for better margins from higher revenue generation and healthy cash flow.

On this, I continue to like under-priced assets like PZ, UACN and WAPCO.
This is simple terms how the CBN hopes that this move drives the needed growth in the real sector.
That other part about getting ur funds to work for u, is where it gets really interesting. It sums up the

essence of this thread.
With the present limited alternative investment instruments, greater chase for better yield(all tenures on T-bills are often largely oversubscribed even @ approx </=3% discount rate), and the CBN now forcing the previous base on savings interest from near

4% to 1.25%(10% of MPR-12.5%), getting ur money to work for u, would definitely mean looking to make a choice out of a scarce few. Unless of course u can afford to take a little more risk.
And yes, u guessed right !! Most funds will have to redirect their chase towards high risk

investment channels. Most funds will find their way to the equities mkt, ceteris peribus !!
The impact this policy can have is strikingly similar to that which has been playing out in most advanced and emerging markets, where negative yields have helped aid and redirected the

massive flow funds to several high risk investment channels, particularly stocks and cryptocurrencies.
I have always said that the recent surge in the stock markets of most advanced and EM economies is purely liquidity-driven pushed by the chase for higher yields, and NOT the

result of any fundamental stance.
Perhaps this move will also help lend a strong voice on why its probably high time to play the Nigerian equities mkt space. ...where some select few asset still posses the potential to deliver positive REAL RETURNS(inflation-adjusted yields)

Bottom line: I'd say there can be no better time to play
the equity mkt than now. Taking position on some select stocks is no doubt a worthy investment decision.
Banks, Consumer goods, Industrial/manufacturing sector.
Just ensure to align with the HEALTHY but UNDERPRICED ones !!

Disclaimer: This review and follow-up inference are in view of the guide as put out by the CBN.
It is however neither subjective nor conclusive. ...due diligence still applies as always.

What to do? ...Pls follow ur instinct.