By Charles Abuede
The Nigerian bourse was fired up on all cylinders on Thursday and it helped the market to sustain its bullish momentum in the face of falling oil prices across the market spectrum; with institutional investors increasing their capital inflows to Nigerian stocks on the prevailing low returns seen in the debt market.
The domestic equities market maintained an uptrend as the benchmark index appreciated 210 basis points to close at 36,239.62 points due to gains in Airtel Africa (+10.0%), Dangote Cement (+2.6%) and Zenith Bank (+2.7%). As a result the market’s year-to-date return improved to 35 per cent and market capitalisation increased by N390.2 billion to hit N18.94 trillion from N18.55 trillion the previous day.
Also, market activity level was mixed as volume traded declined 47.1 per cent to 343.6 million units while value traded surged 90.2 per cent to N4.3 billion. The most traded stocks by volume were FBN Holdings (99.4 million units), United Bank for Africa (22.3 million units) and Access Bank (20.9 million units), while Dangote Cement (N1.3 billion), FBN Holdings (N700.4 million) and Zenith Bank (N388.7 million) led by value.
Performance across sectors of the market was bullish as all indices closed in the green with the AFR-ICT index leading the chart with a 5.7 per cent gain, due to buying interest in Airtel Africa (+10.0%). Trailing, the insurance and industrial goods indices rose 2.4 per cent and 1.3 per cent respectively, following price appreciation in AXA Mansard (+9.1%), AIICO Insurance (+1.7%), and Dangote Cement (+2.6%).
In the same vein, the banking and oil & gas indices advanced, up 1.1 per cent and 0.6 per cent respectively as a result of price uptick in Zenith Bank (+2.75%), Union Bank (+3.8%), Forte Oil (+10.0%) and OANDO (+2.1%). The consumer goods index gained 23 basis points as Unilever (+9.5%) and Dangote Sugar (+0.3%) ticked higher.
Meanwhile, the sentiment of investors as measured by market breadth (advance/decline ratio) decreased to 1.7x from the 1.9x recorded in the previous session as 29 stocks gained against the 17 that declined. However, Airtel Africa (+10.0%), ARDOVA (Forte Oil) (+10.0%) and FTN Cocoa (+9.6%) led the gainers while Omatek (-9.1%), Wapic (-9.1%) and Champion (-9.0%) led the decliners.
The NSE 30
On the NSE 30, the index increased by 0.83 per cent to close at 1,470.61 points as against 1,458.51 points on Wednesday. Market turnover closed with a traded volume of 212.94 million units. Unilever and Ecobank were the key gainers, while FCMB and Fidelity were the key losers.
Foreign Exchange Market
In the foreign exchange arm of the money market, the naira closed at N478 per dollar on the street market; while at the I&E FX market, naira appreciated by 0.17 per cent as the dollar was quoted at N394.00 as against the last close of N394.67. Meanwhile, at the official CBN window, the local currency traded flat at N379 for the greenback as most market participants maintained bids of between N388 and N407.68 per dollar.
Treasury Bills
NT-Bills secondary market closed on a positive note with average yield across the curve declining by 10 basis points to close at 0.43 per cent from 0.53 per cent on the previous day. Average yields across short-term, medium-term, and long-term maturities compressed by three basis points, 18 basis points, and 12 basis points, respectively.
The NT-Bills Primary Market Auction held on Wednesday recorded an oversubscription of N114.53 billion as against the bills offered worth N7 billion with robust demand across all tenors on offer as the bid-to-cover ratios settled at 9.11x (91-day), 5.13x (182-day), and 31.02x (364-day). Despite the substantial subscriptions totalling N121.53 billion, the CBN allotted NT-Bills worth N7 billion across the 91-day (N1.50 billion), 182-day (N1.70 billion), and 364-day (N3.80 billion) tenors. Meanwhile, stop rate for the 91-day cleared higher at 0.05 per cent (+4 basis points), while stop rates for 182-day and 364-day tenors closed significantly lower at 0.50 per cent (-10 basis points) and 1.14 per cent (-206 basis points), respectively.
Also in the OMO bills market, the average yield across the curve remained unchanged at 0.39 per cent. Average yields across short-term, medium-term, and long-term maturities closed flat at 0.36 per cent, 0.49 per cent, and 0.39 per cent, respectively.
Bond Market
The FGN bonds secondary market closed on a positive note today, as the average bond yield across the curve cleared lower by 5 basis points to close at 2.52 per cent from 2.57 per cent on the previous day. The average yield across short tenor of the curve declined by six basis points, while average yields across medium tenor and long tenor of the curve, remained unchanged. The FGNSB 19-JUN-2021 bond was the best performer with a decline in yield of 22 basis points, while there were no bond losers.
Consequently, the FGN Bond Auction for December 2020 was oversubscribed by 123.43 per cent driven by abundant liquidity in the market. Healthy demand was seen across both tenors with bid-to-cover ratios settling at 3.03x (15-year) and 1.44x (25-year). However, the DMO allotted bonds worth N30 billion across the 15-year (N20 billion) and 25-year (N10 billion) tenors. The DMO raised only 50 per cent of the projected offer of N60 billion. Stop rates for the 15-year and 25-year tenors cleared significantly higher at 6.945 per cent (+195 basis points) and 7.000 per cent (+122 basis points), respectively.
