Nigerian bourse opens the week weak as Index down 0.90% Monday

Bearish sentiments in the Nigerian equities market were sustained on Monday trading activities as the benchmark index declined by 0.90 per cent to 31,636.66 points, following sell off across large cap Banking & Consumer Goods stocks.

Thus, the Month-to-Date return (-0.26%) slipped into the negative region, while the Year-to-Date return moderated further to 0.66 per cent.

On sectoral performance, losses were recorded in the Banking (-2.87%), Consumer Goods (-0.68%), Industrial Goods (-0.44%), and Insurance (-0.53%) indices, while the Oil & Gas (+0.01%) index gained marginally.

Notable stocks include ZENITHBANK (-8.82%), NESTLE (-1.99%), WAPCO (-3.47%), CORNERST (-8.7%), and MOBIL (+0.06%), respectively.

Market breadth was negative, with 19 losers and 14 gainers, led by CORNERST (-8.70%) and CADBURY (+10.00%) shares, respectively. Total volume of trades declined by 44.94% to 128.37 million units, valued at NGN2.39 billion, and exchanged in 2,752 deals.

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

In the currency market, USD/NGN appreciated by 0.05 per cent to NGN360.23 in the I&E FX window, but closed flat at NGN360.00 at the parallel market. Total turnover in the IEW declined by 9.40 per cent to USD510.65 million, with trades consummated within the NGN360.00-NGN361.50/USD band.

In the fixed income and money market, the overnight lending rate rose 150 bps to 11.58 per cent, from 10.08 per cent in the previous session, as banks provisioned for the CBN’s wholesale FX intervention.

Trading in the treasury bills market was mixed, as average yield shed 1 bp to close at 13.49 per cent. Yields contracted at the short (-1 bp) and long (-2 bps) ends of the curve, owing to demand for the 59DTM (-33 bps) and 269DTM (-31 bps) bills, respectively. Conversely, yields expanded at the mid (+4 bp) segment, following a selloff of the 185DTM (+15 bps) bill.

Activities in the bond market were bearish, as average yield rose 5 bps to 14.30 per cent. Selloffs were spread across the mid (+13 bps) and long (+7 bps) segments, with respective yields on the MAR-2027 (+39 bps) and APR-2037 (+8 bps) bonds expanding.

Conversely, demand for the JUN-2019 (-17 bps) bond led to yield contraction at the short (-6 bps) end of the curve.