Nigeria bourse retreats as sell-offs continue in Wapco, Zenith Bank, GTBank

By Charles Abuede

• Market cap steeped to N21.9trn as investors lost N164.3bn on Tuesday
• Down from record levels

Negative sentiment spread through the bourse as investors booked stocksand kept the local equities market on a downtrend over major sell-offs in the banking and industrial goods indices, which dragged the market into the red zone with the benchmark index going south by 0.74 per cent to close 42,043.79 points.

It followed from sell-offs in Wapco (-6.7%), Zenith Bank (-3.1%), and GTBank (-2.2%). Consequently, the market year to date return declined to 4.4 per cent while market capitalisation fell by N164.3 billion to settle at N21.99 trillion from the N22.158 trillion on the previous day.

Following the lacklustre performance on the trading floor, the market activity level waned as volume and value traded declined 5.3 per cent and 20.6 per cent, respectively, to 586.8 million units and N4.8 billion. The most traded stocks by volume were Union Bank (79.5million units), Transnational Corporation (52.7million units) and First Bank Holdings (49.5million units) while Zenith Bank (N1.0billion), Union Bank (N457.3million) and Seplat Petroleum (N453.0million) led by value.

Similarly, there was a bearish performance across sectors as all indicators declined except for the AFR-ICT index that inched marginally higher by 1 basis point. The banking and insurance indices lost the most, down 3.1 per cent and 2.3 per cent respectively due to price declines in Zenith Bank (-3.1%), GTBank (-2.2%) and Aiico Insurance (-5.9%). In the same way, sell-offs in Dangote Sugar (-3.2%) and Flour Mills (-1.8%) drove the consumer goods index lower by 0.9 per cent. The industrial goods and oil & gas indices lost 0.5 per cent apiece following price weakness in Wapco Plc (-6.7%) and Ardova Plc (-10.0%).

As measured by the breadth of the market, the investor sentiment fell to 0.2x from the 1.2x recorded previously as 8 stocks gained against 49 losers. Champion Breweries (+9.9%), Unilever plc (+5.2%) and E-Tranzact (+5.2%) were the top gainers while Linkage Assurance (-10.0%), BOC Gas (-10.0%) and ArdovaPlc  (-10.0%) were the top losers.

The NSE 30

The NSE 30 Index decreased by 0.94 per cent to close at 1,702.18 points as against 1,718.30 points on the previous day. Market turnover closed with a traded volume of 296.53 million units. Unilever and Custodian were the only gainers, while Ecobank and Lafarge Africa were the key losers.

Foreign Exchange Market

On the street FX market, the naira maintained its exchange rate of N480 to a dollar. At the Importers’ and Exporters’ (I&E) FX market, the naira depreciated by 0.25 per cent as the dollar was quoted at N395 as against the last close of N394 to the greenback. Most participants maintained bids between N390 and N396 per dollar.

Treasury Bills Market

The NT-Bills secondary market was uneventful as it closed on a flat note, with the average yield across the curve remaining unchanged at 1.22 per cent. Average yields across short-term, medium-term, and long-term maturities closed at 0.53 per cent, 0.74 per cent, and 1.94 per cent, respectively.

In the OMO bills market, the average yield across the curve remained unchanged at 1.81 per cent. Average yields across short-term, medium-term, and long-term maturities closed at 0.90 per cent, 1.85 per cent, and 2.34 per cent, respectively, signifying a quiet outing in the market on Tuesday.

Bonds Market

Following Monday’s bullish close, the FGN bonds secondary market retraced its steps, as bearish sentiment raised the average bond yield across the curve by 14 basis points to close at 4.54 per cent from 4.40 per cent on the previous day. Average yield across short tenor of the curve expanded by 20 basis points, while the average yields across medium tenor of the curve declined by 3 basis points. However, the average yield across long tenor of the curve remained unchanged.

The 23-FEB-2028 maturity bond was the best performer with a decrease in the yield by 28 basis points, while the 27-APR-2023 maturity bond was the worst performer with an increase in yield by 67 basis points.