Bears still dominate proceedings on NSE as Index down 0.11% Wednesday

For the third consecutive session the Nigerian equities market closed in the red  as the market All-Share Index (ASI)  fell by 0.11 per cent to 31,145.34 points, following selloffs across major Consumer Goods counters.

Set against the foregoing, the Month-to-Date loss declined to 0.91 per cent.

On sectoral performance, the Oil & Gas (+1.40%), Insurance (+0.89%), Industrial Goods (+0.23%) and Banking (+0.10%) indices closed positive, on account of respective gains across SEPLAT (+2.88%), CUSTODIAN (+1.54%), BETAGLAS (+0.23%), and GUARANTY (+0.59%).

Meanwhile, the Consumer Goods (-0.76%) index closed in the red, following losses in GUINNESS (8.45%) and NESTLE (-0.69%) respectively.

Market breadth was positive with 23 gainers and 18 losers, led by CORNERST (+10.00%) and AIRSERVICE (-9.79%) stocks respectively. Meanwhile, total volume decreased by 30.6 per cent to 249.54 million units, valued at NGN3.12 billion, and exchanged in 4,018 deals.

According to analysts Cordros Capital, “the absence of a positive catalyst and political concerns ahead of the 2019 election guide our conservative outlook for equities in the short-to-medium term. However, stable macroeconomic fundamentals remain supportive of recovery in the long term”.

In the currency market, the USD/NGN appreciated marginally by 0.01per cent  to NGN363.32 at the I&E FX window, but remained flat at NGN363.00 in the parallel market. Total turnover in the IEW fell by 35% to USD61.23 million, with trades executed within the NGN360-363.80/USD band.

The fixed income and money market had the overnight lending rate declined further by 633 bps to close at 4.50 per cent, still supported by yesterday’s FAAC inflows (NGN357 billion), and in the absence of an OMO auction.

Proceedings in the NTB market were bullish, as average yield compressed by 4 bps to 14.82%. There was demand across the mid (-7 bps) and long (-5 bps) segments, with the yield on the 176DTM (-46 bps) and 295DTM (-45 bps) bills recording respective contractions. Yield at the short end of the curve was flat.

At today’s primary action, the CBN fully allotted NGN254.64 billion worth of bills – NGN28.02 billion of the 91-day, NGN58.68 billion of the 182-day and NGN167.93 billion of the 364-day – at respective stop rates of 11.00 per cent (same as previous auction), 13.50 per cent (previously 13.10%), and 15.00 per cent (same as previous auction).

Trading in the bond market was also bullish, as average yield moderated by 3 bps to 15.08 per cent. Demand was concentrated at the short (-11 bps), and long (-2 bps) ends of the curve, with yield on the JUN-2019 (-30 bps) and MAR-2036 (-7 bps) bonds recording significant contractions, respectively.

Conversely, a selloff of the FEB-2028 (+4 bps) led to yield expansion at the mid (+2 bps) segment. At today’s primary auction, the DMO allotted a total of NGN116.98 billion – NGN5.85 billion of the APR-2023 (re-opening), NGN20.10 billion of the MAR-2025 (re-opening), and NGN91.04 billion of the FEB-2028 (re-opening) – in bonds (vs. NGN150 billion offered), at respective stop rates of 15.20% (vs. 15.25 per cent at the previous auction), 15.25 per cent (vs. 15.50 per cent at the previous auction), and 15.35 per cent (vs. 15.50% at the previous auction).