Bearish run continues on Nigerian bourse as index down by 0.48% Wednesday

The bearish trend with which the market opened the week continued on Wednesday as the ASI fell by 0.48 per cent to 31,023.47 points — its lowest level since Jun 1. 2017 — following persisting selloffs across blue-chip counters.

As a result, the Month-to-Date and Year-to-Date losses increased to 4.44 per cent and 18.88 per cent, respectively.

Among sectoral indices, the Oil & Gas (-0.79%), Industrial Goods (-3.91%), and Banking (-2.83%) indices closed negative, largely attributable to losses in OANDO (-6.06%), DANGCEM (-1.55%) and ZENITHBANK (-1.48%), respectively.

On the flip side, investor interest in CONTINSURE (+10.00%) and PZ (+8.06%) led to positive returns in the Insurance (+0.51%) and Consumer Goods (+0.08%) indices, respectively.

Market breadth remained negative, with 23 losers and 12 losers, led by DIAMONDBNK (-9.88%) and CONTINSURE (+10.00%) shares, respectively.

The volume of trades for the day grew by 20.9 per cent to 220.40 million units, valued at NGN2.73 billion and exchanged in 3,252 deals.

“Our outlook for equities in the near-to-medium term is negative, and we guide investors to trade cautiously, amidst absence of a near term positive catalyst and political jitters ahead of the upcoming 2019 elections. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term”, analysts at Codros Capital said”.

In the currency market, the USD/NGN weakened by 0.27 per cent to NGN366 in the parallel market, while it strengthened marginally by 0.02 per cent to NGN364.15 in the I&E FX window.

Total turnover in the IEW dropped 8.41 per cent in yesterday’s session to USD134.90 million, consummated within the NGN358.00-NGN365.50/USD band.

Also in the Fixed Income and Money Market, the overnight lending rate rose by 79 bps to close at 18.00%, in the absence of any significant inflows.

Proceedings in the NTB market were bearish, as average yield increased by 31 bps to 14.51%. Selloffs ensued across all segments of the curve — short (+57 bps), mid (+27 bps) and long (+7 bps) — with the yields on the 50DTM (+94 bps), 113DTM (+50 bps), and 344DTM (+27 bps) bills expanding.

Meanwhile, at today’s NTB auction, NGN150.60 billion worth of bills – NGN24.37 billion of the 91-day, NGN23.16 billion of the NGN182-day, and NGN103.07 billion of the 364-day — were sold at respective stop rates of 10.90% (vs.10.95% at the previous auction), 13.10% (vs. 13.16% at the previous auction), and 14.45% (same as previous auction).

Bullish sentiments returned to the bond market, as average yield moderated by 5 bps to 15.32%. Yields contracted across the short (-3 bps), mid (-4 bps) and long (-8 bps) ends of the curve, driven by demand for the FEB-2020 (-26 bps), MAR-2024 (-8 bps), and JUL-2034 (-15 bps), respectively.