The bull fights back as Nigerian bourse up 0.67% Tuesday

Positive earnings releases largely neutered the tense political landscape as the Nigeria’s equities market returned to the positive territory on Tuesday as  the benchmark index rose by 0.67 per cent to 32,406.17 points, following investors’ interest across Tier-1 bank stocks.

Set against the foregoing, the Month-to-Date and Year-to-Date gains notched slightly higher to 5.35 per cent and 3.10 per cent respectively.

The Banking (+2.97%), Oil and Gas (+0.74%), Consumer Goods (+0.26%) and Insurance (+0.24%) indices closed in the green on account of strong buying sentiments across ZENITH (+5.63%), OANDO (+6.25%), UNILEVER (+0.46%), and CUSTODIAN (+8.26%). Meanwhile, the Industrial Goods (-0.21%) index closed negative, driven by sell-off in DANGCEM (-0.41%).

Market breadth was positive, with 16 gainers and 14 losers, led by JAPAULOIL (+9.52%) and FIRSTALUM (-10.00%). Elsewhere, total volume and value traded increased sharply by 55.45 per cent and 23.70 per cent to 361.80 million units and NGN4.16 billion, respectively, and exchanged in 4,623 deals.

“In the absence of a positive catalyst, as well as brewing political concerns, we guide investors to trade cautiously in the short term. However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term”, analysts at Cordros Capital said.

The naira traded flat against the dollar at NGN360 in the parallel market, while it depreciated marginally by 0.04 per cent to NGN362.20 in the I&E FX window. Total volume of trades in the IEW depreciated by 78.0 per cent to USD75.84 million in yesterday’s session, with total trades consummated within the NGN360.00-NGN363.30/USD band.

In the fixed income and money market, the overnight lending rate moderated by 1,025 bps to 15.83 per cent, in the absence of any significant outflows.

Sentiments in the NTB market were bullish, in the absence of any OMO sales for the second consecutive day, as average yield shed 26 bps to 14.47 per cent. Demand for the 23DTM (-243 bps), 100DTM (-36 bps), and 212DTM (-71 bps) bills, led to respective yield contraction at the short (-73 bps), mid (-3 bps), and long (-12 bps) ends of the curve.

Proceedings in the bond market were largely bearish, as average yield widened by 7 bps to 14.70 per cent. Selloffs of the JUL-2021 (+48 bps), JUL-2030 (+9 bps) and MAR-2036 (+21 bps) bonds led to yield expansion at the short (+14 bps), mid (+2 bps) and long (+6 bps) segments, respectively.