Bearish sentiment returns in local bourse with price decline in major market tickers; investors lost N9.4bn

• Nigerian naira stays calm in the streets but appreciates in the I & E window

Charles Abuede

The Nigerian Equities Market had a marginally negative outing in Tuesday’s session due to the profit-taking witnessed across top tickers while Price declines in Zenith Bank (-2.2%), ETI International (-5.9%) and Flour Mill (-2.4%) dragged performance in the market. Consequently, the benchmark index declined 0.05 per cent to 38,704.97 points, while market year to date loss worsened to -3.9 per cent and market capitalisation declined to N20.3 trillion. Thus, investors lost N9.4 billion resulting from continued sell-offs in the market.

In contrast, the trading activity level improved as volume and value increased 48 per cent and 96 per cent respectively to 410.4 million units and N6 billion. The most traded stocks by volume were Dangote Sugar (107.1m units), Union Bank of Nigeria (78.5m units) and Transnational Corporation (31.6m units) while Dangote Sugar (N1.8bn), GTBank (N832.3m) and Stanbic IBTC (N499.8m) led by value.

Furthermore, there was a bullish performance across the sectorial fronts as 4 indices closed northward. The Insurance index led the gainers, up 0.6 per cent following price uptick in Wapic Plc (+10.0%) and AXA Mansard (+1.0%). Also, the oil & gas and consumer goods indices appreciated 0.3 per cent and 0.1 per cent respectively on the back of gains in Oando Plc (+1.6%) and Nigerian Breweries (+2.1%). Buying interest in MTN Nigeria (+0.1%) drove a 6 basis points gain in the ICT index. On the flip side, sell-offs in Zenith Bank (-2.2%) and ETI International (-5.9%) pushed the Banking banking index lower by 0.7 per cent. Lastly, the Industrial goods index closed flat.

On the other hand, the Investor sentiment, as measured by market breadth weakened to 1.0x from the 3.3x recorded previously as 19 stocks gained against 20 decliners. Wapic Plc (+10.0%), Chemical and Allied Products Plc (+10.0%) and Nigerian Police Force Microfinance Bank (+9.9%) were the top gainers while Livestock (-9.5%), Chams Plc (-8.7%) and Cornerstone Insurance (-6.7%) were the top decliners.

NSE 30

Elsewhere, the NSE 30 Index decreased by 0.13 per cent to close at 1,536.46 points as against 1,538.43 points as on the previous day. Market turnover closed with a traded volume of 323.10 million units. Julius Berger and Nigerian Breweries were the key gainers, while Ecobank and Flour Mills were the key losers.

FX Market

In the foreign exchange market, the Naira was steady at N486 to a dollar in the street market (NAFEX) while there was an appreciation by 0.08 per cent to N409.80 per dollar from N410.13, recording N0.33 stronger day on day as against the dollar. Meanwhile, most market participants maintained bids between N401 and N412 per dollar.

T-Bills market

In the treasury bills market on Tuesday, the NT-bills sold off as bearish sentiment pervaded trading, despite pockets of demand in the market. Against this backdrop, the average T-bills yield rose 6 basis points to 3.54 per cent from 3.48 per cent as on the previous trading day. Thus, the average yield across short-term maturities expanded by 65 basis points, while the average yield across medium-term maturities declined by 34 basis points. However, the average yield across long-term maturities closed flat at 4.52 per cent.

In the OMO bills market, yield pointed lower propelled by buying interest at the front end of the market as the average yield across the curve decreased by 3 basis points to close at 6.35 per cent as against the last close of 6.38 per cent. Buying interest was seen across medium-term maturities with average yields falling by 6 basis points. However, the average yields across short-term and long-term maturities closed flat at 3.48 per cent and 8.05 per cent, respectively.

Bonds market

FGN bonds secondary market closed on a mildly positive note today, as the average bond yield across the curve cleared lower by 1 basis point close at 6.16 per cent from 6.17 per cent on the previous day. The average yield across the short tenor of the curve compressed by 1 basis point, while the average yields across the long tenor of the curve increased by 1 basis point. However, the average yield across the medium tenor of the curve remained unchanged.

The 27-JAN-2022 instrument was the most sought after (-17bps). On Wednesday, the Debt Management Office (DMO) will be reopening up to N150 billion across the FGN MAR 2027, FGN MAR 2035, and FGN JUL 2045 instruments.