Sell pressure depresses Nigerian equities market on Thursday

Trading activities in the Nigerian equities market turned negative on Thursday as investors took profit from the gains in the prior sessions. The benchmark index dipped by 0.14 per cent to 32,568.65 points, driven by sell-offs across bellwether stocks.

Accordingly, the Month-to-Date and Year-to-Date gains tapered to 6.58% and 3.62%, respectively.

On sectoral breakdown, the Banking (-0.27%), Consumer Goods (-0.85%), and Insurance (-0.98%) indices closed negative, following sell-offs in ZENITHBANK (-1.73%), INTBREW (-9.48%), and LINKASSURE (-10.00%) shares.

Meanwhile, the Industrial Goods (+0.16%) and Oil & Gas (-0.07%) indices closed in the green, on account of positive performance in DANGCEM (+0.31%) and OANDO (+3.17%) shares respectively.

The market breadth was positive, with 20 gainers and 15 losers, led by IKEJAHOTEL (+9.94%) and LINKASSURE shares, respectively. Total volume of trades declined by 50.3 per cent to 220.61 million units, valued at NGN2.24 billion, and exchanged in 4,327 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.

In the currency market, the naira traded flat against the dollar at NGN360 in the parallel market, while it appreciated by 0.15 per cent to NGN361.48 in the I&E FX window.

Total volume of trades in the IEW rose by 37.2% to USD545.06 million in yesterday’s session, with trades consummated within the NGN360.00-NGN363.25/USD band.

In the fixed income and money market, the overnight lending rate moderated by 92 bps to 14.58 per cent, following inflows from matured OMO bills (NGN578.99 billion). The CBN mopped up NGN688.19 billion via OMO auction, selling NGN7.91 billion of the 98DTM, NGN53.06 billion of the 189DTM and NGN627.22 billion of the 364DTM, at respective stop rates of 11.90 per cent, 13.50 per cent and 15.00 per cent.

Proceedings in the treasury bills market were bullish, as average yield moderated by 7 bps to 14.39 per cent. Interest in the 43DTM (-101 bps) bill drove yield contraction at the short (-35 bps) end of the curve.

Meanwhile, yield notched higher at the mid (+10 bps) segment, driven by a selloff of the 99DTM (+43 bps) bill. Yield was flat at the long end of the curve.

Activities in the bond market were bearish as average yield rose by 3 bps to 14.79%. There were sell-offs across the mid (+5 bps) and long (+5 bps) segments, underpinned by the MAR-2024 (+7 bps) and MAR-2036 (-19 bps) bonds. Yield at the short end of the curve was flat.