Nigeria bourse maintains positive run as MTN, BUACem drive market to yield N324.6bn gains

By Charles Abuede

• Index up 1.9% to close at 33,268.36 points
• Naira down N1 on dollar on street market despite CBN’s net FX supplier to the tune of $259mn

The equities market surged Wednesday, building on its sharp gains from the two previous sessions this week, as buying interests in bellwetherstocks drove the benchmark index up by 1.9 per cent to close at 33,268.36 points on the back of gains in MTN (+2.4%), Nigerian Breweries (+9.5%) and BUA Cement (+2.4%). Consequently, investors gained N324.6 billion as market capitalisation rose to N17.4 trillion while the year to date return improved to 23.9 per cent.

Meanwhile, market activity level also surged as volume and value traded increased by 48.3 per cent and 17.0 per cent to 858.2million units and N9.1 billion, respectively. The most traded stocks by volume were FBN Holdings (145.1million units), Transnational Corporation (126.3million units) and Zenith Bank (60.8million units) while Zenith Bank (N1.5billion), Guaranty Trust Bank – GTB – (N1.2billion) and Dangote Cement (N1.1billion) led by value.

Bullish sector performance 

The bullish performance pinned all sectors in the positive zone. The banking and consumer goods indices advanced 4.1 per cent and 2.6 per cent, respectively, to lead the gainers, buoyed by price appreciation in Zenith Bank (+4.5%), GTB (+2.9%), and Nigerian Breweries (+9.5%). Similarly, the AFR-ICT and oil & gas indicators advanced 1.4 per cent and 1.3 per cent respectively on account of buying interest in MTN (+2.4%), OANDO (+9.8%) and ARDOVA (+3.8%). Finally, the insurance and industrial goods indices strengthened 1.2 per cent and 1.1 per cent respectively as investors positioned in Cornerstone (+3.3%), WAPCO  (+3.8%) and BUA Cement (+2.4%).

Investor sentiment strengthens

Investor sentiment as measured by market breadth (advance/decline ratio) surged to 7.3x from the 3.5x recorded previously as 51 tickers gained against 7 losers. NEIMETH (+10.0%), FIDSON (+10.0%), Sterling Bank (+10.0%) and Guinness Plc (+10.0%) were the top gainers while Learn Africa (-4.8%), C and I Leasing (-4.7%) and Stanbic IBTC (-4.2%) led the decliners.

The NSE 30

The NSE 30 Index increased by 2.00 per cent to close at 1,448.22 points as against 1,419.76 points posted the previous day. Market turnover closed with a traded volume of 534.76 million units. Guinness and Sterling were the key gainers, while Stanbic IBTC was the only loser.

Money Market

Despite the CBN’s continuing to maintain its hold as net foreign exchange (FX) supplier to the tune of $259 million in the I&E FX market, following an increase in outflows by 22 per cent to $896 million, the naira depreciated by N1.00 to settle at N466 per dollar on the street FX market compared to its previous close of N465/$. Similarly, at the I&E FX market, the domestic currency depreciated by 0.04 per cent as the dollar was quoted at N385.83 as against the last close of N385.67. Most participants maintained bids of between N380.00 and N393.57 per dollar.

Treasury Bills

Positive sentiment prevailed in the T-bills market, Wednesday, as buying interests at the mid and long end of the curve drove yields down by 5 basis points to close at 0.46 per cent from 0.51 per cent on the previous day. Average yields across medium-term and long-term maturities compressed by 1 basis point and 10 basis points, respectively, while the average yield across short-term maturities closed flat at 0.36 per cent. Maximum buying interest was witnessed in the NTB 28-Oct-21 (-19 bps), NTB 16-Sep-21 (-16 bps), and NTB 9-Sep-21 (-15 bps) maturity bills.

At the Primary Market Auction, demand was strong as the bid ratio rose 5.0x,9.2x and 3.0x as the CBN offered NT-Bills worth N130.60 billion across the 91-day (N20.37 billion), 182-day (N19.16 billion), and 364-day (N91.07 billion) tenors.

Bullish sentiment permeated the OMO market as bargain hunting dominated the short end of the curve. Consequently, the average yield across the curve declined by 4 basis points to close at 0.21 per cent as against the last close of 0.25 per cent. Buying interest was seen across short-term maturities with the average yield falling by 9 basis points. However, average yields across medium-term and long-term maturities remained unchanged at 0.23 per cent and 0.27 per cent, respectively. Yields on 6 bills compressed with the 2-Feb-21 maturity bill recording the highest yield decline of 26 basis points, while yields on 19 bills remained unchanged.

Bond market

The FGN bonds secondary market closed on a negative note due to dampened mood from sharp profit bookings across the curve. The average bond yield across the curve cleared higher by 5 basis points to close at 1.84 per cent from 1.79 per cent on the previous day. Average yields across medium tenor and long tenor of the curve widened by 29 basis points and 5 basis points, respectively, while the average yield across short tenor of the curve fell by 1 basis point.

Consequently, the FGNSB 13-NOV-2021 bond was the best performer with a decline in yield of 13 basis points, while the 26-APR-2029 maturity bond was the worst performer with an increase in the yield of 53 basis points.