Bargain hunters feast on Airtel, MTN, Lafarge as Nigeria bourse swings higher

By Charles Abuede

• Market analysts anticipate the trend to linger through the week, outweighing the trickles of selloffs

Nigeria’s equities market’s performance was majorly driven Tuesday by unrelenting bargain hunting activities across top stocks with sound fundamentals as the benchmark index rose 1.21 per cent to close at 41,584.94 points, following strong demand in Airtel Africa (+7.6%), MTN Nigeria (+0.5%) and Wapcoplc (+3.8%).

As a result, the market year to date return improved to 3.3 per cent while market capitalisation increased N259.4 billion to settle at N21.75 trillion from N21.49 trillion on the previous trading session.

Similarly, the activity level advanced as volume and value traded rose 40.5 per cent and 110.8 per cent to 467.9 million units and N5.6 billion respectively. The most traded stocks by volume were Transnational Corporation (45.9million units), AXA Mansard (34.7million units) and Sovereign Insurance (26.4million units) while Airtel Africa (N1.2billion), Zenith Bank (N501.0million) and Dangote Cement (N494.6million) topped by value.

There was a bullish performance across sectors as 4 indicators gained against 2 that lost. The AFR-ICT index led gainers, up 3.9 per cent owing to buying interest in Airtel Africa  (+7.6%) and MTN Nigeria (+0.5%). Trailing, the consumer goods and insurance indices advanced 0.5 per cent and 0.4 per cent respectively, following price appreciation in Flour Mills (+6.3%), Unilever Plc (+2.3%), AXA Mansard (+2.2%) and Prestige Assurance(+8.0%). Similarly, gains in WapcoPlc (+3.8%) drove the industrial goods index 0.3 per cent higher. On the flip side, the oil  & gas and banking indices lost 5.3 per cent and 0.1 per cent respectively due to sell-offs in Seplat Petroleum (-9.3%), OandoPlc (-1.8%), Zenith Bank (-0.9%) and Sterling Bank (-2.5%).

Investor sentiment as measured by market breadth (advance/decline ratio) improved to 1.8x from 0.7x recorded previously as 32 stocks advanced against 18 losers. RTBRISCOE (+10.0%), Champion Plc (+9.8%) and Universal Insurance (+9.5%) were the top-performing tickers while John Holt (-10.0%), Seplat Petroleum (-9.3%) and Academy (-9.1%) were the major losers.

NSE 30

Meanwhile, the NSE 30 Index marginally increased by 0.08 per cent to close at 1,686.36 points as against 1,685.00 points on the previous trading day. Market turnover closed with a traded volume of 151.46 million units. Flour Mills and Lafarge Africa were the key gainers, while Seplat and Sterling Bank were the key losers.

Forex trading

In the foreign exchange market, the Nigerian naira lost its strength by N3 day on day against the dollar at the street foreign exchange market as it exchanged hands at N480 per dollar. Thus, on a year to date basis, the naira is trading 2.1 per cent down at its weakest level. Meanwhile, the pressure eased at the Importers’ and Exporters’ (I&E) Window, as the naira traded at N394 to a dollar, N0.50 stronger than its previous close of N394.50. Most market participants maintained bids of between N390 and N395 per dollar.

T-Bills trading

In the NT-Bills market, the bearish sentiment was sustained on the back of profit-taking across the mid and long end of the curve. The selloffs on Tuesday lifted the average yield by 3 basis points to 0.6 per cent at the close of trading. Also, the average yields across medium-term and long-term maturities expanded by 1 basis point and 7 basis points, respectively. However, the average yield across short-term maturities closed flat at 0.23 per cent.

OMO trading

Similarly, the average yield across the curve increased by 7 basis points in the OMO market on Tuesdayto close at 1.29 per cent from 1.22 per cent, on the previous day. Selling pressure was seen across short-term and medium-term maturities with average yields increasing by 16 basis points and 7 basis points, respectively. However, the average yield across long-term maturities closed flat at 2.07 per cent. Yields on 6 bills advanced with the 16-Mar-21 maturity bill recording the highest yield increase of 45 basis points, while yields on 17 bills remained unchanged.

Bond trading

Elsewhere, the pace of profit-taking quickened in the bond market, buoying yields across the tickers by 21 basis points to 7.4 per cent. Yield increases were noted on the long end (+39bps) and the short end of the curve (+28bps) with profit-taking sharpest on the 26-APR-2049 instrument (+101bps). On the other hand, there were bargain hunting activities at the belly of the curve (-2bps).

Meanwhile, the FGN bonds secondary market closed on a negative note on Tuesday as the average bond yield across the curve cleared higher by 8 basis points to close at 3.61 per cent from 3.53 per cent on the previous day. Average yields across short tenor, medium tenor, and long tenor of the curve increased by 2 basis points, 19 basis points and 39 basis points, respectively.