Nigeria bourse in red as selloffs in banking, consumer goods stocks see bears return  

By Charles Abuede

• 8bn taken from investors during profit booking activities

Pockets of profit booking activities prevailed across top counters on the Nigerian Stock Exchange Thursday as investors resumed selling activities.

Despite the two-day uptrend, the Nigerian equities market ended in the negative territory following sell-offs in Nigerian Breweries (-3.7%), Access Bank (-4.7%) and Zenith Bank (-1.7%). As a result, the benchmark index lost 31 basis points to close at 40,095.49 points, as the market year to date return worsened to -0.4 per cent and market capitalisation fell by N65.8 billion to N21.0 trillion.

Also, trading activity weakened as volume and value tanked 30.6 per cent and 47.6 per cent to 326.0 million units and N3.7 billion respectively. The most traded stocks by volume were Transnational Corporation (48.4m units), Dangote Sugar (33.9m units) and UBA (27.5m units), while Zenith Bank (N637.6m), Dangote Sugar (N611.8m) andGTBank (N478.8m) led by value.

On the sectorial pane, the market performance across sectors was mixed as 3 of 6 indices closed southward. Leading the chart for the laggards was the banking index which was down 1.4 per cent due to price decline in Access Bank (-4.7%) and Zenith Bank (-1.7%). Also, the consumer goods and oil & gas indices closed lower at 0.8 per cent and 0.2 per cent respectively, following sell pressures in Nigerian Breweries (-3.7%), Dangote Sugar (-0.6%) and OandoPlc (-1.8%). Conversely, trading with a positive return was the insurance index, which rose 0.2 per cent following buying interest in Wapic Insurance (+3.7%) and AXA Mansard (+0.9%). Lastly, the industrial goods and ICT indices closed flat.

Also on Thursday, investor sentiment as measured by market breadth weakened to 0.6x from the 1.0x recorded previously as 14 stocks advanced against 23 decliners. ChamsPlc (+9.1%), Royal Exchange (+8.0%) and Wema Bank (+7.7%) were the top gainers while Lasaco Insurance (-9.7%), Fidson Pharmaceuticals (-8.4%) and Ecobank (-6.3%) were the top losers.

NSE 30

The NSE 30 Index declined by 0.44 per cent to close at 1,607.94 points as against 1,614.97 points the previous day. Market turnover closed with a traded volume of 165.45 million units. Fidelity and Union Bank were the only gainers, while Ecobank and Access Bank were the key losers.

FX market

In the foreign exchange market, the Naira steadied at N480 for the greenback in the parallel market, while at the I&EWindow, the Naira exchanged N0.13 higher at N408.67 per dollar compared to N408.80 for the United States dollars on yesterday. Meanwhile, most market participants maintained bids between N390.00 and N429.75 per dollar.

Treasury Bills market

The NT-bills market traded mildly bearish as yields rose by one basis point to 1.5 per cent as the direction of trade was dictated by selloffs at the intermediate segment of the market, although most tickers settled flattish. Also, the average yield across the medium-term maturities expanded by 3 basis points due to selling pressure witnessed in the NTB 26-Aug-21 (+10 bps) and NTB 29-Jul-21 (+4 bps) maturity bills. However, the average yields across the short-term and long-term maturities closed flat at 0.57 per cent and 2.01 per cent, respectively.

Moreover, the CBN held its scheduled Primary Market Auction on February 24, selling NT-Bills worth N147.27 billion (approx N19.05 billion more than the offered amount of N128.22) across the 91-day (N24.18 billion), 182-day (N32.71 billion), and 364-day (N90.38 billion) tenors. The stop rates for the 91-day, 182-day and 364-day tenors cleared higher at 2.00 per cent (+100 bps), 3.50 per cent (+150 bps), and 5.50 per cent (+150 bps), respectively. The auction was oversubscribed by 50 per cent, with bid-to-cover ratios settling at 1.35x (91-day), 0.72x (182-day), and 2.39x (364-day).

In the OMO market, trade settled on a bearish note, mirroring selloffs across the long end of the market. Thus, yields increased by one basis point to an average of 6.1 per cent. Notably, the apex bank mopped up N325.5 billion out of the system via the sales of N45.5 billion, N50 billion, and N230 billion bills across the 96-day, 173-day, and 362-day. It was noticed that the 362-day sold at 10.10 per cent unchanged from the previous auction. The 96- day and 173-day instruments also sold at 7 per cent and 8.5 per cent each. Thus, the average yields across the short-term, medium-term, and long-term maturities closed at 3.31 per cent, 5.07 per cent, and 7.51 per cent, respectively.

Bonds Market

Bonds yields continued to fall as investors positioned at the short and long end of the market. After the trade, the average yield stood at 9.2 per cent, 5 basis points lower than its previous close. As a result, the short end (-11bps) and the long end (-5bps) closed bullish, while the belly of the curve stayed flat. The 22-Jan-26 instrument was the most bought (- 144bps) while the 14-MAR-2024 maturity bond was the worst performer with an increase in yield of 48 basis points.