Investors bargain-hunt MTN Nigeria, Airtel Africa for N163.2bn gains on NGX

• Naira trades N509/$ in quick recovery mode

Investors on a bargain hunting rally on Tuesday extended the gaining streak on the Nigerian Exchange for a second consecutive trading day in August with telecoms sector stocks the biggest gainers.

Investors, for instance, continued to react positively to MTN Nigeria’s half-year 2021 earnings result. And with Airtel Africa announcing the signing of a $200 million investment agreement with Qatar Holding LLC, into the telco’s mobile money business, investors did not fail to take notice.

The local bourse maintained its bullish performance, clawing in N163.2 billion in gains for investors, gains that were fuelled by buying interest in MTN Nigeria (+1.8%), Airtel Africa (+5.7%), and Wema Bank (+6.0%). It helped the market’s All-Share index rise by 0.81 percent to 38,917.99 points, with the market year to date loss improving to -3.4 percent while market capitalisation rose to N20.277 trillion from N20.114 trillion at the previous session.

However, the level of trading activity was mixed as the volume traded fell by 5.3 percent to 231.5 million units, while the total value traded rose by 11.8 percent to N2.1 billion. Transnational Corporation led the chart of the most traded securities by volume on Tuesday (17.5m units), with Jaiz Bank (16.6m units), and Honeywell Flour (13.0m units) following on the log, while MTN Nigeria (N376.8m), Guaranty Trust Holding Company (N200.5m), and Zenith Bank (N175.8m) led the chart of most traded securities by value.

On the flip side, the performance across the sectoral front was lacklustre as four indices lost, one gained, while the industrial goods index closed flat. The insurance and banking indices led the losers table, performing below par down 1.0 percent and 0.8 percent respectively due to sell-offs in Mutual Benefits Assurance (-5.1%), Wapic Plc (-1.9%), Access Bank (-2.2%) and Zenith Bank (-0.8%).

This was followed by the bearish outing on the consumer goods and oil & gas indices which fell by 0.3 percent and 0.2 percent respectively due to price depreciation in Honeywell Flour (-7.8%), Ardova Plc (-1.8%), and Oando Plc (-0.6%). The ICT sector was the only gainer, up 3.4 percent on the back of bargain hunting in MTN Nigeria (+1.8%) and Airtel Africa (+5.7%).

Investors’ market sentiment declined to 0.4x from 0.6x recorded in the last trading session as 11 stocks advanced while 26 stocks declined. Wema Bank (+6.0%), Airtel Africa (+5.7%), and Court Ville (+4.2%) led gainers, while FTN Cocoa Processors (-8.2%), Honeywell Flour (-7.8%), and Mutual Benefits Assurance (-5.1%) led decliners.

NGX 30 Index

The NGX 30 Index slightly improved by 0.09 percent to close at 1,642.12 points as against 1,640.67 points the previous day. Thus, market turnover closed with traded volume of 78.49 million units. Unilever and MTN Nigeria were the key gainers, while Access Bank and International Breweries were the key losers.

FOREX Market

In the currency market the Naira sustained its recovery from the knee-jerk reaction of the market following the Central Bank of Nigeria’s restriction of FX sales to Bureau De Change last week. The rate at the parallel FX market appreciated by N3 on the greenback as it traded at N509 per dollar from N512 the previous day. At the Investors’ and Exporters’ Window (I&EW), the Naira was stable around N411.50 per dollar, unchanged from the prior trading session. Most participants maintained bids between N405 and N412.15 per dollar.

T-BILLS Market

In the Nigerian treasury bills secondary market, pockets of demand across the curve drove the market into a bullish close with the average yield across the curve dwindling 16 basis points to close at 5.73 percent from 5.89 percent on the previous day. As a result, the average yields across short-term, medium-term, and long-term maturities weakened by one basis point, 22 basis points, and 21 basis points, respectively. Meanwhile, yields on 13 bills fell with the 24-Feb-22 maturity bill recording the highest yield decline of 45 basis points, while yields on 8 bills remained unchanged.

Elsewhere in the OMO bills market, the typical yield across the curve stayed flat at 8.09 percent as the average yields across short-term, medium-term, and long-term maturities closed flat at 7.71 percent, 8 percent, and 8.69 percent, respectively.

BONDS Market

In the FGN bonds secondary market, it was mildly positive as the average bond yield across the curve cleared lower by 6 basis points to close at 9.15 percent from 9.21 percent on the previous day due to buying interests. Consequently, average yields across the short and medium tenors of the curve declined by 6 basis points and 10 basis points, respectively. However, the average yields across the long tenor of the curve remained unchanged. The 27-JAN-2022 maturity bond was the best performer with a decline in yield of 33 basis points, while the 17-MAR-2027 maturity bond was the worst performer with an increase in yield of 9 basis points.