Nigerian bourse begins the week bearish as index down 0.46%

The Nigerian equities market started the week bearish, with the benchmark index dropping 0.46  per cent to 31,533.50 points, following broad selloffs across Banking sector stocks.

Accordingly, the Month-to-Date and Year-to-Date losses increased to 2.73 per cent and 17.42 per cen, respectively.

Among sectoral indices, the Banking (-0.91%) index recorded the largest loss, owing to the selloffs in GUARANTY (-1.37%) and UBA (-1.92%) shares.

The Consumer Goods (-0.31%), and Industrial Goods (-0.04%) indices also closed negative, owing to losses in the shares of NB (-2.58%) and WAPCO (-1.79%).

On the flip side, interest in CONTINSURE (3.33%) and OANDO (+1.04%), led to gains in the Insurance (+0.62%) and Oil & Gas (+0.12%) indices, respectively.

Market breadth remained negative with 19 losers and 18 gainers, led by DIAMONDBNK (-9.47%) and PZ (+9.86%), respectively. Total volume and value of trades dropped by 53.2% and 26.1% to 104.87 million units and NGN1.94billion, respectively, exchanged in 2,911 deals.

“We guide investors to trade cautiously in the short to medium term, as selloffs are likely to persist, amidst brewing political uncertainty, and the absence of a positive catalyst. However, stable macroeconomic fundamentals remain supportive of long-term gains”. Analysts at Cordros Capital advised.

Also, the USD/NGN appreciated by 0.23 per cent to NGN363.85 at the I&E FX window, while it remained flat at NGN364 in the parallel market. Total value of trades in the IEW grew by 66.5 per cent to USD249.28 million in last Friday’s session, with trades consummated within the NGN358.00-NGN365.60/USD band.

The overnight lending rate expanded 917 bps to 15.75 per cent, from 6.58 per cent last Friday, as the CBN mopped up excess liquidity via OMO auction, selling a total of NGN161.08 billion — NGN19.07 billion of the 192DTM, and NGN142.01 billion of the 360DTM — worth of bills, at respective stop rates of 13.00% and 14.50%. The apex bank also offered NGN30 billion of the 115DTM bill, however, no sales were recorded.

Activities in the treasury bills market were mixed, albeit with a bearish tilt, following the liquidity mop-up, as average yield rose by 4 bps to close at 14.10 per cent.

Yield at the long (+1 bp) end of the curve expanded, driven by a selloff of the 304DTM (+15 bps) bill. Conversely, demand for the 87DTM (-21 bps) and 143TM (-16 bps) bills led to respective yield contraction at the short (-4 bps) and mid (-5 bps) segments.

Bearish sentiments prevailed in the bond market, with average yield rising marginally by 1bp to 15.36 per cent. There was sell pressure at the short (+1 bp) and long (+2 bps) ends of the curve, with the FEB-2020 (+7 bps) and JUL-2034 (+2 bps) bonds recording respective yield expansions. Yield at mid segment closed flat.