Nigerian bourse opens the week weak, down 0.05%

The Nigeria’s equities market started the week on a bearish note as the benchmark index contracted by 0.05 per cent to 29,196.87 points, driven by sell-off across Industrial Goods and Banking stocks

Thus, the Month-to-Date and the Year-to-Date loses increased to 5.94 per cent and 7.11 per cent respectively.

On sectoral performance, losses in Banking (-0.68%), Industrial goods (-0.51%) and Oil & Gas (-0.15%) mask gains in Insurance (+2.35%) and Consumer Goods (+0.10). Notable stocks include GUARANTY (-1.35%), CCNN (-3.47%), DANGCEM (+0.56%) and DANGFLOUR (+3.8%)

Market breadth was negative, with 14 losers and 13 gainers, led by UAC-PROP (-8.93%) and NEM (+9.95) shares respectively. Total volume of trades decreased by 23.88% to 271.01 million units, valued at NGN1.39 billion, and exchanged in 3814.00 deals.

“In our view, the sustained sell-offs in the Nigerian equities market is overdone compared to peer markets. This provides a basis for the ASI to recover in the absence of further downside risks. Beyond the obvious, we believe that the blend of positive macroeconomic fundamentals and compelling valuations supports our view of a near term recovery”, analysts at Cordros Capital said.

In the currency USD/NGN depreciated by 0.16 per cent  to NGN361.24 and by 0.3 per cent  to NGN361.00 at the I&E FX window and parallel market, respectively. Total turnover in the IEW decreased by 32.00 per cent to USD109.52 million, with trades consummated within the NGN358.50-NGN361.50/USD band.

In the money market & fixed income, the overnight lending rate expanded by 614 bps to 12.07 per cent, as the CBN mopped-up liquidity via OMO auction, selling a total of NGN 312.38 billion – NGN 26.33 billion of the 108DTM, NGN21.03 billion of 199DTM and NGN265.02 billion of 353DTM – worth of bills at respective stop rates of 11.80 per cent (same as previous auction, 12.88% (previously 12.90%), and 12.94% (previously 13.029%).

Activities in the treasury bills market were bullish, as the average yield compressed 8 bps to close at 13.04%. Demand for 87DTM (-88 bps), 115DTM (-31 bps) and 221DTM (31 bps) led to yield contraction at the short (-13 bps), mid (-8 bps) and long (-6 bps) segments of the curve.

Trading in the bond market was similarly bullish, as average yield contracted by 10 bps to close at 14.16 per cent. Buy sentiment was evident at the short (-24 bps) end of the curve with yield on JUN-2019 (-130 bps) bond recording a significant contraction.

Conversely, a selloff of the FEB-2028 (+4 bps) bond led to yield expansion at the mid (+1 bps) segment. The long end of the curve was flat.