Banking, FMCG, industrial stocks drag Nigeria bourse down as negative sentiments rule bulls

By Charles Abuede

• Sell-offs in Zenith, Access, Flour Mills
• Money & Fixed-income markets mixed

It was a negative outing at the Nigerian equities market on Tuesday as persistent profit-taking activities, which were also reflected in the performance of the NSE 30 Index, pinned the broader index underwater.

Amid signs of early gains witnessed during the trading session, the local bourse sustained a bearish trend as sell-offs in Zenith Bank (-1.3%), Access Bank (-2.4%) and Flour Mills Plc (-4.5%) led the All Share Index to fall marginally by -0.09 per cent to 35,033.74 points.

As a result, the year-to-date return and market capitalization settled at 30.34 per cent and N18.31 trillion (N18.33 trillion the previous day), respectively.

Meanwhile, the day’s market activity level was mixed as the volume of transactions dipped 5.4 per cent and the market turnover perked up 2.6 per cent. Also, a total volume of 306.9 million units of shares, valued at N3.27 billion exchanged hands in 4,500 deals with United Bank for Africa (UBA) topping the trades chart with 142.4 million (46.4%) traded units and N1.2 billion (36.7%) worth of transactions, for the second consecutive time, while the market breadth settled at 0.82x, reflecting fourteen (14) gainers outweighed seventeen (17) losers.

However, there was a mixed performance across the NSE sectoral indices as the insurance and the oil & gas sectors rose by 0.45 per cent and 0.26 per cent respectively; but banking (-0.34%), consumer goods (-0.10%), and industrial goods (-0.09%) sectors closed south.

Market breadth index was negative with 18 losers against 14 gainers. WAPIC (-4.76%) led the laggards in Tuesday’s session, while FTNCOCOA (+9.68%) was the top gainer.

The NSE 30

The NSE 30 index decreased by 0.10 per cent to close at 1,458.08 points as against 1,459.61 points on the previous day. Market turnover closed with a traded volume of 243.29 million units. Ecobank and Dangote Sugar were the key gainers, while Flour Mills and Access Bank were the key losers.

Foreign exchange

In the currency market, the Naira depreciated by N1 to close at N483 to the greenback as against the previous N482 per dollar, indicating renewed pressure at the street foreign exchange (FX) market. Also, at the Importers’ & Exporters’ FX market, the naira remained stable at N395 per dollar. Most participants maintained bids between N384 and N404.11 per dollar.

Treasury Bills

In the run-up to the Central Bank of Nigeria’s N50.9 billion Primary Market Auction (PMA) on Wednesday, the Nigerian Treasury-Bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 0.12 per cent. Average yields across short-term, medium-term, and long-term maturities closed flat at 0.06 per cent, 0.09 per cent, and 0.18 per cent, respectively. However, the demand at the Primary Market Auction is anticipated to remain elevated with investors expected to position with more concentration on the long end tenor.

On the other hand, in the OMO bills market, the average yield across the curve increased by 10 basis points to close at 0.35 per cent as against the last close of 0.25 per cent. Selling pressure was seen across short-term and long-term maturities with average yields rising by 14 basis points and 9 basis points, respectively. However, the average yield across medium-term maturities closed flat at 0.45 per cent. Yields on 9 bills advanced with the 26-Oct-21 maturity bill registering the highest yield increase of 44 basis points, while yields on 13 bills remained unchanged.

Bonds Market

Meanwhile, the FGN bonds secondary market closed on a negative note Tuesday, as the average bond yield across the curve cleared higher by 3 basis points to close at 1.76 per cent from 1.73 per cent on the previous day. Average yields across medium tenor and long tenor of the curve widened by 7 basis points and 23 basis points, respectively, while the average yield across short tenor of the curve compressed by 1 basis point. The 27-JAN-2022 maturity bond was the best performer with a decline in yield of 3 basis points, while the 24-JUL-2045 maturity bond was the worst performer with an increase in yield of 126 basis points.