Nigerian bourse maintains bearish run as Index decreases by 0.35% Thursday

The Nigerian equities market sustained its bearish run for second day in a row as the benchmark index decreased by 0.35 per cent to 32,010.06 points on Thursday, following profit taking activities across all sectors.

Thus, the Month-to-Date and Year-to-Date returns both moderated to 0.92 per cent and 1.84 per cent, respectively.

On sectoral performance, all sector indices recorded declines – Banking (-0.13%), Consumer Goods (-0.17%), Industrial Goods (-0.39%), and Insurance (-1.00%). Notable stocks include, GUARANTY (-0.79%), FLOURMILL (-4.76%), DANGCEM (-0.76%), MOBIL (-5.56%), and MBENEFIT (-8.00%).

Consequently, market breadth was negative, with 26 losers and 9 gainers, led by UPL (-9.78%) and CADBURY (+7.84%) shares, respectively. Total volume of trades increased slightly by 4.9% to 218.90 million units, valued at NGN2.74 billion, and exchanged in 3,519 deals.

According to analysts at Cordros Capital, ‘the still tense political environment guides our view of cautious trading in short term. However, attractive valuations and stable macroeconomic fundamentals leave scope for sustained market recovery in the medium-to-long term’.

In the currency market, the USD/NGN depreciated by 0.08 per cent to NGN360.49 in the I&E FX window, but closed flat at NGN360.00 at the parallel market.

Total turnover in the IEW increased significantly by 502.37 per cent to USD552.13 million, with trades consummated within the NGN356.00-NGN361.71/USD band.

In the fixed income and money market, the overnight lending rate moderated by 17 bps to 9.58 per cent, following inflows from matured OMO bills (NGN228.95billion). The CBN mopped up a total of NGN292.63 billion via OMO auction, selling NGN44.98 billion of the 91DTM and NGN247.65 billion of the 175DTM, at respective stop rates of 11.90per cent and 13.45 per cent.

Proceedings in the treasury bills market were bullish, as average yield moderated by 29 bps to 13.05 per cent. Interest in the 133DTM (-44 bps) and 322DTM (-103 bps) bills drove yield contraction at the mid (-12 bps) and long (-48 bps) segments. Meanwhile, yield notched higher at the short (+5 bps) end of the curve, driven by a selloff of the 56DTM (+199 bps) bill.

Activities in the bond market were also bullish as average yield fell by 7 bps to 14.15 per cent. Demand was concentrated at the short (-20 bps) end of the curve with yield on the FEB-2020 (-50 bps) bond contracting significantly. Yield at the mid and long segments were flat.