Pressured sell-offs in large-cap stocks forces market into red as investors lost N371.3bn on Tuesday

Charles Abuede

The Nigerian equities market reversed Monday’s trading session gains to resume its bearish run as pressured sell-offs in large capitalization stocks such as; MTN Nigeria (-5.9%), Zenith Bank (-12.7%), Wapco Plc (-7.95%), and UBA (-10.0%)pushed the NSE-ASI lower by 1.80 per cent to settle at 38,686.85 points. Hence, the market year to date performance retracted to 3.97 per cent and market capitalisation declined to N20.2 trillion while market investors lost N371.3 billion on Tuesday due to sell-offs in the large caps.

On the contrary, the level of trading activity improved as volume and value of transactions advanced by 64.8 per cent and 110.8 per cent respectively to 490.0 million units and N6.7 billion. The most traded stocks by volume were UBA (123.3m units), Mutual Benefit (58.0m units) and First Bank Holding (48.9m units) while MTN Nigeria (N2.4bn), UBA (N887.6m) and Zenith Bank (N776.4m) led the top trades by value.

On the sectoral front, 5 out of 6 indices closed in the red to indicate a bearish performance across all market sectors with the consumer goods index standing as the only gainer and up by 0.4 per cent as a result of price appreciation in Dangote Sugar (+8.0%), Nascon industries (+7.7%) and Champion Breweries (+9.8%). On the other hand, the banking and ICT indices lost 5.3 per cent and 2.9% per cent respectively due to sell-offs in Zenith Bank (-12.7%), UBA (-10.0%) and MTN Nigeria (-5.9%). Also, the Insurance and Industrial goods indices fell 0.6 per cent and 0.5 per cent respectively following sell pressures in Wapic Plc (-5.9%), Prestige Assurance (-6.7%) and Wapco Plc (-8.0%); while the oil and gas index was dragged lower by 0.2 per cent due to price declines in Eterna Plc (-10.0%) and Japaul Gold (-2.0%).

Investor sentiment, as measured by market breadth, was negative and weakened to 0.6x from the 1.7x recorded previously as 14 stocks advanced against 26 that declined. Champion Breweries (+9.8%), Neimeth Pharmaceuticals (+9.7%) and Cutix Plc (+8.8%) were the top gainers while UBA (-10.0%), Eterna Plc (-10.0%) and Caverton (-9.5%) were the top losers.

Also, the NSE 30 Index decreased by 2.27 per cent to close at 1,538.71 points as against 1,574.44 points as on the previous day. Market turnover closed with a traded volume of 301.64 million units. Dangote Sugar and Nascon were the key gainers, while UBA and Sterling were the key losers.

FX market

In the foreign exchange market, the Naira marginally depreciated by 0.03 per cent as the dollar was quoted at N412 to the dollar as against the last close of N411.88 per dollar, in the investors and exporter window while the CBN official window remain flat at N379 to a dollar. Most participants maintained bids between N390 and N412 per dollar.

Treasury Bills market

The NT-Bills secondary market closed on a flat note on Tuesday, with the average yield across the curve remaining unchanged at 1.88 per cent. Thus, the average yields across short-term, medium-term, and long-term maturities closed at 0.53 per cent, 1.38 per cent, and 2.99 per cent, respectively.

While in the OMO bills market, the average yield across the curve increased by 41 basis points to close at 6.63 per cent as against the last close of 6.22 per cent. Selling pressure was seen across short-term and medium-term maturities with average yields rising by 86 basis points and 158 basis points, respectively. However, the average yields across long-term maturities declined by 6 basis points. Yields on 9 bills advanced with the 18-May-21 maturity bill registering the highest yield increase of 284 basis points, while yields on 16 bills remained unchanged.

Bond Market

Elsewhere, at the FGN bonds secondary market, it closed on a mildly positive note as the average bond yield across the curve cleared lower by 2 basis points to close at 5.67 per cent from 5.69 per cent on the previous day. Average yields across short tenor and long tenor of the curve decreased by 2 basis points and 5 basis points, respectively. However, the average yield across the medium tenor of the curve remained unchanged. The FGN Sukuk Bond 13-MAR-2021 bond was the best performer, with a decline in yield of 20 bps. Moreover, we expect the secondary bond market to remain subdued in the near term.