Stronger gains in Zenith, UBA, BUACem spurred Monday’s N69bn profit for investors

Charles Abuede

Stronger gains in top counters outpaced the losses observed on small and midcap counters on Monday as investors made home with N69 billion in profit on what is seeming to be a week of mixed trading and weakened sentiments while firms churn out more earnings results.
This first trading day in the month of March signs in with a positive note following price advancements in the banking and industrial goods sectors such as Zenith Bank (+1.4%), UBA (+2.5%) and BUA Cement (+3.8%). As a result, the benchmark index gained 33 basis points to close at 39,931.63 points as the market year to date return moderated to -0.8 per cent and market capitalisation increased by N68.9 billion to N20.9 trillion.
However, the trading activity level was mixed as the volume of transactions improved by 7.2 per cent to 544 million units and value dipped 22.7 per cent to N1.9 billion. The most traded stocks by volume were Wema Bank (369.7m units), Zenith Bank (20.6m units) and Transnational Corporation (13.0m units) while Zenith Bank (N529.1), Wema Bank (N240.3m) and MTN Nigeria (N151.2m) led by value.
A look at the various sectors in Monday’s trading revealed a mixed sectoral performance as 3 out of 6 indices trended southward. There were records of gains of 1.5 per cent and 0.3 per cent in the industrial and banking sector indices respectively owing to price appreciation in BUA Cement (+3.8%), Zenith Bank (+1.4%) and UBA (+2.5%). On the other hand, the insurance and consumer goods indices closed lower by 1.1 per cent and 0.5 per cent apiece due to selling pressures in AXA Mansard (-1.9%), Wapic (Coronation) (-5.6%), Nascon (-10.0%) and PZ Cussons (-9.4%). Sell-offs in Oando Plc (-1.2%) dragged the oil & gas index lower by 0.1 per cent. Lastly, the ICT index closed flat.
Market investor sentiment as measured by market breadth waned to 0.4x from the 0.7x recorded previously as 12 stocks advanced against 28 decliners. UAC Nigeria (+6.7%), Aiico Insurance (+5.2%) and Veritas Kapital (+5.0%) were the top gainers, while consumer goods tickers such as Nascon (-10.0%), Champion Breweries (-9.9%) and PZ Cussons (-9.4%) were the major losers.

Furthermore, the NSE 30 Index increased by 0.45 per cent to close at 1,600.64 points as against 1,593.45 points on the previous day. Market turnover closed with a traded volume of 74.17 million units. BUA Cement and UBA were the key gainers, while Nascon and Sterling Bank were the key losers.

FX market
In the foreign exchange market, the Naira held steady at N482 for the dollar at the parallel FX market while the Importers’ & Exporters’ window rate appreciated by N1.05 to trade at N409.20 to the greenback from its previous close of N410.25 per dollar, as most market participants maintained bids of between N392 and N415 per dollar.

Treasury bills market
The NT-Bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 1.49 per cent. Thus, the average yields across short-term, medium-term, and long-term maturities closed at 0.57 per cent, 1.48 per cent, and 2.01 per cent, respectively.
Also, following selloffs at the long end of the market, the average yield increased by 5 basis points to 6.1 per cent as against Friday’s close of 6.09 per cent, while investor apathy was observed along the short and intermediate segments. Thus, the average yields on short-term and medium-term maturities closed flat at 3.30 per cent and 5.07 per cent, respectively. Maximum selling pressure was witnessed in the OMO 25-Jan-22 (+75 bps) and OMO 18-Jan-22 (+37 bps) maturity bills, while yields on 15 bills remained unchanged.

Bond market
In the Bond market, bearish sentiment dominated trade despite pockets of buying interests across the short end and belly of the curve. Accordingly, the average bond yield across the curve cleared higher by 3 basis points to close at 5.21 per cent from 5.18 per cent on the previous day. Average yields across the medium tenor and long tenor of the curve increased by 21 basis points and 1 basis point, respectively. However, the average yield across the short tenor of the curve remained unchanged. The 26-APR-2029 maturity bond was the best performer with a decline in yield of 15 basis points, while the 22-JAN-2026 maturity bond was the worst performer with an increase in yield of 175 basis points.
Meanwhile, in the bond market on Monday, the DMO began the offering of a 2-Year FGN Savings Bond due March 10, 2023, and a 3-Year FGN Savings Bond due March 10, 2024, at the interest rate of 5.181 per cent per annum and 6.181 per cent per annum, respectively. Though, the bond auction is scheduled to close on March 5, with settlement on March 10, 2021. However, the interest will be paid quarterly, with a redemption bullet repayment on the date of maturity.