DangCem, Zenith, UBA sell-offs push Nigeria bourse into negative zone

By Charles Abuede

• Mixed grill for money market

The stock market maintained its previous sessions’ losses as the Nigerian Stock Exchange(NSE) All-Share Index (ASI) depreciated by 1.96 per cent to close at 40,696.01 points due to sell-offs in heavyweight stocks such as Dangote Cement (-7.4%), Zenith Bank (-3.1%), and UBA (-6.9%). As a result, market capitalisation declined by N425.9 billion to settle at N21.3 trillion, while market year to date return fell to 1.1 per cent.

The recent sell-offs in the equities market have been credited to the trivial rise in yields in the fixed income space, which some analysts say is very prone to create entry opportunities for investors. However, confidence persists among analysts and investors that the bull run will be retained in the market.

On the other hand, market activity level improved as volume and value traded rose 19.9 per cent and 38.7 per cent respectively to 366.9 million units and N5.5 billion. The most traded stocks by volume were Zenith Bank (43.7millionunits), First Bank Holdings (40 million units) and GTBank (36 million units) while GTBank (N1.2billion), Zenith Bank (N1.1billion) and MTN Nigeria (N846.2million) led by value.

The sectoral performancewas largely bearish as 5 of 6 indices closed southward, save the Oil & Gas index which closed flat. The industrial goods and banking indices lost 3.7 per cent and 3.4 per cent, respectively, due to sell-offs in Dangote Cement (-7.4%), Wapco Plc (-2.6%), Zenith Bank(-3.1%) and GTBank (-1.5%). Similarly, the insurance and consumer goods indices fell 1.2 per cent and 0.4 per cent, respectively, following sell pressures in Aiico Insurance (-6.7%), Linkage Assurance (-9.1%), Flour Mill (-5.7%) and Dangote Sugar (-2.3%). Lastly, the AFR-ICT index declined 2 basis points on the back of a price decline in E-Tranzact (-10.0%).

Investor sentiment, as measured by market breadth, worsened to 0.4x from the 1.0x recorded previously as 13 stocks gained against 36 losers. Niger Insurance (+10.0%), Champion Breweries (+9.8%) and Wapic (Coronation)Plc (+7.4%) were the top gainers while Regency Insurance (-10.0%), Chemical and Allied Product (-10.0%) and Fidson Pharmaceuticals (-10.0%) were the top losers.

The NSE 30

The NSE 30 Index fell by 2.19 per cent to close at 1,642.29 points as against 1,679.06 points as on the previous day. The market turnover closed with a traded volume of 214.39 million units. Guinness and International Breweries were the key gainers, while Ecobank and Dangote Cement were the key losers.

Foreign exchange market

In the foreign exchange market, the Naira appreciated to N478 to the dollar in the parallel market, N2 stronger than its previous close of N480. The same was recorded with the Naira appreciating by 0.25 per cent as the dollar was quoted at N400 as against the last close of N401 in the I&E window.  Also, at the CBN Official Window, Naira remains unchanged, closing at N379 for the greenback on Wednesday from the last close. Most participants maintained bids at between N390.00 and N422.59 per dollar.

Treasury Bills market

At the Primary Market Auction held Wednesday, the apex bank offered NT-Bills worth N169.78 billion across 91-day (N19.78 billion), 182-day (N10 billion), and 364-day (N140 billion) tenors, respectively.

But the treasury bills market closed on a flat note with the average yield across the curve remaining unchanged at 1.03 per cent. Average yields across short-term, medium-term, and long-term maturities closed at 0.51 per cent, 0.74 per cent, and 1.44 per cent, respectively.

In the OMO bills market, selling pressure was seen across short-term maturities with the average yield rising by 45 basis points as the average yield across the curve increased by 13 basis points to close at 6.69 per cent as against the last close of 6.56 per cent. However, the average yields across medium-term and long-term maturities closed flat at 5.43 per cent and 8.04 per cent, respectively. Yields on 4 bills advanced with the 23-Feb-21 maturity bill registering the highest yield increase of 71 basis points, while yields on 17 bills remained unchanged.

Bond Market

In the bonds secondary market, the FGN bonds closed negative with the average yield across the curve tilting higher by 20 basis points at 4.8 per cent from the 4.6 per cent on the previous day trade. Also, average yields across the short tenor, medium tenor and long tenor of the curve increased by 31 basis points, 33 basis points and 1 basis point, respectively. The 18-MAR-2036 maturity bond was the best performer decreasing by 5 basis points, while the 17-MAR-2027 maturity bond was the worst performer with a 156 basis points yield increase.