Nigerian bourse extends gains as Index rises by 0.45%

The Nigerian equities market extended gains from last week as the benchmark index appreciated by 0.45 per cent to 29,964.79 points on Monday, following buying sentiment in DANGCEM shares.

Accordingly, the Month-to-Date loss moderated to 4.66 per cent.

Most sectoral indices – Consumer Goods (-0.07%), Banking (-0.08%), Oil & Gas (-0.27%), and Insurance (-1.53%) – closed negative.

The notable stocks include GUINNESS (-1.52%), WEMABANK (-8.33%), FO (-3.45%), and LINKASSURE (-9.23%). Meanwhile the Industrial (+1.08%) index closed positive on account of the gain in DANGCEM (+1.69%).

Market breadth was flat with 11 losers and 11 gainers, led by LINKASSURE and FIRSTALUM (+9.09%) stocks respectively. Total volume moderated by 35.8 per cent to 132.41 million units, valued at NGN1.09 billion, and exchanged in 2,542 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 the 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 appreciated by 0.18 per cent to NGN364.30 and 0.28 per cent to 362.00 at the I&E FX window and in the parallel market respectively.

Total turnover in the IEW increased by 24.1 per cent to USD219.98 million, with trades consummated within the NGN360.00-366.00/USD band. Meanwhile, the apex bank, on Friday, intervened in the FX market — its first intervention in this window this year — injecting USD263 million into the interbank retail Secondary Market Intervention Sales (SMIS), and selling CNY39 million in spot and short-tenured forwards.

In the Fixed Income and Money Market, the overnight lending rate surged by 1,058 bps to 35.25 per cent, from 24.67 per cent in the previous session, following wholesale FX provisioning as well as the CBN’s OMO intervention, where in  NGN25.14 billion – NGN4.47 of the 94DTM, NGN1.13 billion of the 185DTM, and NGN19.54 billion of the 353DTM – worth of bills were sold at respective stop rates of 11.9 per cent, 13.5 per cent, and 15.0 per cent.

Trading in the treasury bills market was bullish, as average yield moderated by 6 bps to 15.25 per cent. Yields contracted at the short (-12 bps) and long (-9 bps) ends of the curve, owing to demand for the 66DTM (-81 bps) and 255DTM (-47 bps) bills, respectively. Conversely, yields expanded at the mid (+9 bps) segment, following a selloff of the 94DTM (+92 bps) bill.

Activities in the bond market were bearish, as average yield rose by 7 bps to 15.32 per cent. Sell pressure was concentrated at the short (+19 bps) and mid (+5 bps) segments, with yield on the JUN-2019 (+39 bps) and JAN-2026 (+10 bps) bonds expanding respectively. Conversely, demand for the APR-2037 (-4 bps) bonds led to yield contraction at the long (-4 bps) end of the curve.