Nigerian equities market starts December negative as Index down 0.24% on Monday

The Nigerian equities market got off to a red start in December as the ASI posted a negative return of 0.24 per cent to close at 30,798.76 points, following sell-offs across major counters.

Among sectoral indices, the Insurance (-4.51%) index posted the heaviest loss amidst sell-off in CONTINSURE (-10.00%).

Also, the Industrial (-0.03%) and Consumer Goods (-0.72%) indices also closed negative, driven largely by negative performance across DANGCEM (-1.02%), and NB (-2.66%).

Conversely, the Banking (+0.61%) and Oil & Gas (+2.07%) indices were positive, following investors’ interest in SEPLAT (+4.16%) and ZENITHBANK (+1.72%) shares.

Market breadth was positive with 19 gainers and 14 losers, led by JAIZBANK (+10.00%) and CONTINSURE (-10.00%) respectively. Total volume and value traded increased by 0.1% and 13.6% to 249.74 million units and NGN2.7 billion respectively, and exchanged in 3,122 deals.

“Our outlook for equities in the near to medium term remains conservative, in the absence of a near term one-off positive catalyst; and more so, amidst political uncertainty ahead of the upcoming general elections. However, stable macroeconomic fundamentals remain supportive of recovery in the long term”. Analysts at Cordros Capital said.

In the Currency market, The naira strengthened at the I&E window (+0.03% to NGN364.00) but closed flat at the parallel window at NGN370.00 to a dollar.

Total turnover at the I&E window moderated markedly by 93.8 per cent to USD24 million with total trades consummated within the NGN360.00-NGN369.00/USD band.

Similarly at Fixed Income and Money Market, the overnight lending rate shed 969 bps to close at 7.67 per cent, with liquidity expected to be supported by inflows from FAAC disbursement later today.

The CBN conducted an OMO auction, selling a total of NGN54.62 billion — NGN14.06 billion of the 192DTM, and NGN40.56 billion of the 353DTM — worth of bills, at respective stop rates of 13.50% and 15.00 per cent. The apex bank also offered NGN20 billion of the 87DTM bill, however, no sales were recorded.

Activities in the treasury bills market were bearish, following the liquidity mop-up, as average yield rose by 28 bps to close at 15.03 per cent. Yields across the short (+52 bps), mid (+19 bps), and long (+11 bps) ends of the curve expanded, driven by a selloff of the 10DTM (+153 bps), 101DTM (+84 bps) and 325DTM (+48 bps) bills, respectively.

Bearish sentiments prevailed in the bond market, with average yield rising by 6bps to 15.47 per cent. There was sell pressure at the short (+5 bps), mid (+10 bps), and long (+3 bps) ends of the curve, with the JUL-2021 (+17 bps), MAR-2024 (+16 bps), and MAR-2036 (+8 bps) bonds recording respective yield expansions.