Nigerian equities market bleeds further as index down 1.33% Thursday

The rout in the Nigerian equities market continued for the fifth consecutive session, with the benchmark index dropping 1.33 per cent to 30,611.55 points, as selloffs across major counters persisted.

As a result, the Month-to-Date and Year-to-Date losses increased to 5.71 per cent and 19.96 per cent, respectively.

As in the previous session, the Industrial Goods (-2.14%), Banking (-1.79%), and Oil & Gas (-0.05%), indices closed negative, largely attributable to losses in DANGCEM (-2.63%), GUARANTY (-3.65%), and OANDO (-1.08%), respectively.

On the flip side, investor interest in CONTINSURE (+6.95%) and NB (+0.51%) led to positive returns in the Insurance (+3.09%) and Consumer Goods (+0.05%) indices, respectively.

Market breadth remained negative with 23 losers and 12 gainers, led by ABCTRANS (-9.68%) and VERITASKAP (+10.00%) shares respectively. Total volume and value of trades rose by 100.4 per cent and 63.6 per cent to 441.61 million units, valued at NGN4.46 billion, and exchanged in 3,648 deals.

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

In the currency market, the USD/NGN depreciated for third consecutive day in the parallel market, declining by 1.08% to NGN370. The move was the biggest since declining 1.09 on Aug. 10, 2017.

Conversely, the USD/NGN appreciated by a marginal 0.02per cent to NGN364.08 in the I&E FX window. Total turnover in the IEW surged 189.2 per cent to USD390.15 million, with trades consummated within the NGN358.00-365.60/USD band.

Fixed Income and Money Market had the overnight lending rate moderated by 317 bps to 14.83 per cent, as today’s inflow of matured OMO bills (NGN443.76 billion) boosted system liquidity. The CBN conducted an OMO auction, selling a total of NGN371.46 billion — NGN100.00 million of the 98DTM, NGN63.81 billion of the 182DTM and NGN307.65billion of the 364DTM — worth of bills, at respective stop rates of 11.65 per cent, 13.25 per cent and 14.75 per cent.

Sentiments in the NTB market were bullish, as average yield shed 5 bps to 14.46 per cent. Demand was spread across the short (-17 bps) and mid (-9 bps) segments, with respective yields on the 49DTM (-57 bps) and 161DTM (-34 bps) bills contracting. Conversely, a selloff of the 315DTM (+64 bps) bill led to yield expansion at the long (+11 bps) end of the curve.

Proceedings in the bond market were slightly bearish, as average yield rose by 1 bp to 15.34 per cent. There were selloffs at the short (+2 bps) and long (+4 bps) ends of the curve, with the FEB-2020 (+32 bps) and MAR-2036 (+6 bps) bonds recording the largest expansions, respectively. On the flip side, demand for the MAR-2024 (-7 bps) bond led to yield contraction at the mid (-1 bp) segment.