Nigerian bourse begins the week weak as Index falls by 0.18%

The Nigerian equities market started the week negative, as the market All-Share Index (ASI) fell by 0.18 per cent to 32,143.41 points, owing to sell pressure in banking stocks.

Accordingly, the Month-to-Date and Year-to-Date losses increased to 0.99 per cent and 15.95 per cent, respectively.

The Banking (-1.06%) and Insurance (-1.30%) indices were top losers, with 8 stocks (of the 12 losers) in the financial services segment (7 banks, 1 insurance company) bearing losses.

In particular, respective losses in GUARANTY (-1.75%) and NEM (-8.21%) stocks led to the indices’ negative returns. On the flip side, the Consumer Goods (+0.17%) and Oil & Gas (+0.75%) indices closed positive, owing to gains in FLOURMILL (+7.14%) and OANDO (+6.45%) stocks. The Industrial Goods index closed flat.

Market breadth turned positive with 14 gainers and 12 losers, led by REGALINS (+10.00%) and ABBEYBDS (-9.40%) stocks respectively. Total volume of trades rose by 17.19 per cent to 142.11 million units, valued at NGN1.56 billion, and exchanged in 2,772 deals.

Analysts at Cordros Capital have this to say about the performance of the market: “We reiterate our negative outlook for the equities market in the short to medium term, amidst political concerns ahead of the 2019 elections, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term”.

The naira weakened against the dollar by 0.08 per cent to NGN363.89 in the I&E FX window, while it closed flat at NGN363 in the parallel market. Meanwhile, total turnover in the IEW rose by 42.25 per cent to USD188.43 million in Friday’s session, vs. the previous session, with trades consummated within the range of NGN345.00-NGN365.50/USD.

The overnight lending rate rose 200 bps to 7.00 per cent, from 5.00 per cent in the previous session, as banks provisioned for the CBN’s wholesale FX intervention.

Trading in the treasury bills market was mixed, as average yield closed flat at 13.67 per cent. Yields contracted at the short (-1 bp) and long (-2 bps) ends of the curve, owing to demand for the 31DTM (-59 bps) and 262DTM (-13 bps) bills, respectively. Conversely, yields expanded at the mid (+1 bp) segment, following a selloff of the 122DTM (+20 bps) bill.

Activities in the bond market were bearish, as average yield rose 2 bps to 15.39 per cent. Selloffs were spread across the mid (+5 bps) and long (+8 bps) segments, with respective yields on the MAR-2024 (+8 bps) and MAR-2037 (+14 bps) bonds expanding. Conversely, demand for the FEB-2020 (-9 bps) bond led to yield contraction at the short (-5 bps) end of the curve