Stocks edge higher on Thursday as buying interest in banking and ICT indices fuelled N106.5bn profit for investors

Charles Abuede

The consecutive positive tides continued in the market for a second straight session as a result of the impressive corporate earnings and buying interest in Stanbic IBTC (+9.2%), MTN Nigeria (+1.2%), and GTBank (+0.5%). This fuelled the NSE- All-Share Index to rise 0.53 per cent to 39,293.14 points while the market year to date loss improved to -2.4 per cent as investors gained N108.5 billion as market capitalisation rose to N20.6 trillion.

Nonetheless, trading activity level waned as volume and value of transactions declined 36.6 per cent and 33.7 per cent respectively to 229.4 million units and N3.8 billion. The most traded stocks by volume were Union Bank (79.6m units), GTBank (19.3m units), and Zenith Bank (12.1m units) while MTN Nigeria (N1.6bn), GTBank (N599.0m) and Zenith (N421.7m) led by value.

There was a bullish performance across the sectorial front as 4 indicators trended northward. The Insurance index led the gainers, up 0.8 per cent due to price appreciation in Wapic Plc (+10.0%) and African Insurance (+5.0%). Similarly, the Banking and ICT indices rose 0.6 per cent apiece on account of buying interest in Stanbic IBTC (+9.2%), GTBank (+0.5%) and MTN Nigeria (+1.2%). Gains in Wapco Plc (+1.2%) drove the industrial goods index up by 7 basis points. On the flip side, sell-offs in Oando Plc (-0.6%) and Dangote Sugar (-2.7%) dragged the Oil & Gas and consumer goods indices lower by 5 basis points and 24 basis points respectively.

Investor sentiment, as measured by market breadth (advance/decline ratio), strengthened to 1.9x from the 1.3x recorded previously as 23 stocks gained against 12 decliners. Wapic Plc (+10.0%), United Property Development Company REIT (+9.8%) and EKO Pharmacy (+9.6%) were the top gainers while Sovereign Insurance (-8.3%), Nigerian Police Force Microfinance Bank (-7.2%) and Prestige Assurance (-6.8%) were the top decliners.

NSE 30

The NSE 30 Index increased by 0.65 per cent to close at 1,563.93 points as against 1,553.86 points as on the previous day. Market turnover closed with a traded volume of 165.17 million units. Stanbic IBTC and Sterling were the key gainers, while Dangote Sugar and UBA were the only losers.

FX market

For the fourth straight day this week in the foreign exchange market, the Naira stayed calm at N486 per dollar while at the investors and exporters window, it depreciated by 0.24 per cent as the dollar was quoted at N409.75 as against the last close of N408.75. Most participants maintained bids between N394 and N414 per dollar.

Treasury bills market

The NT-bills market traded bearish spurred by higher yields across the intermediate segment. The average yield firmed up 14 basis points higher to 4 per cent from 3.90 per cent on the previous day. The average yield across the medium-term maturities expanded by 47 basis points. However, the average yields across short-term and long-term maturities closed flat at 2.06 per cent and 5.32 per cent, respectively. Yields on 6 bills advanced with the 16-Sep-21 maturity bill recording the highest yield increase of 75 basis points, while yields on 14 bills remained unchanged.

In the OMO bills market, the average yield across the curve decreased by 1 basis point to close at 6.57 per cent as against the last close of 6.58 per cent. Mild buying interest was seen across medium-term and long-term maturities with average yields declining by 2 basis points and 5 basis points, respectively. However, the average yields across short-term maturities increased by 8 basis points. Yields on 15 bills compressed with the 30-Nov-21 maturity bill registering the highest yield decrease of 12 basis points, while yields on 8 bills remained unchanged.

Bond market

Bearish sentiment was sustained in the Bond market as yields rose 12 basis points to close at 6.83 per cent from 6.71 per cent on the previous day. Average yields across short tenor, medium tenor, and long tenor of the curve increased by 13 basis points, 7 basis points, and 15 basis points, respectively. The FGNSB 10-APR-2021 bond was the best performer with a decline in yield of 5 basis points, while the 24-JUL-2045 maturity bond was the worst performer with an increase in the yield of 71 basis points.

Also, the FGN Bond Auction for March 2021 was oversubscribed by 122 per cent (N333.48 billion) as the auction witnessed healthy demand across all the tenors with bid-to-cover ratios settling at 1.31x (10-year), 2.20x (15-year), and 3.16x (25-year). The DMO raised bonds worth N262.10 billion at 74.73 per cent more than the amount offered across the 10-year (N44.01 billion), 15-year (N86.29 billion), and 25-year (N131.80 billion) tenors at marginal rates of 10.50 per cent (+25 bps), 11.50 per cent (+25 bps), and 12 per cent (+20 bps), respectively.