THUR, JANUARY 03 2019-theG&BJournal- EQUITIES were lower today amidst general political worries and despite stable macroeconomic fundamentals. The pessimism reflects yesterday’s performance, which saw the Nigerian Stock market open the year’s trading on a bearish note.
Yesterday the All Share Index dipped by 1.07% with 22 stocks posting declines and only 16 making gains. The bears continued to rear its head today with the ASI moderating by 0.96% to 30,771.32 points, following sell-offs across both tier-1 and tier-2 banking stocks. The Month-to-Date loss notched higher to 0.21%.
The Industrial (-2.83%), Banking (-2.15%), Insurance (-0.12%) and Consumer Goods (-0.02%) indices closed negative following losses in WAPCO (-4.17%), GUARANTY (-4.49%), SOVRENINS (-4.76%) and DANGSUGAR (-1.69%) respectively. Meanwhile, the Oil and Gas (+0.64%) closed positive on account of gains in FO (+9.64%).
Market breadth turned negative with 13 gainers and 23 losers, led by FO (+9.64%) and GLAXOSMITH (-10.00%), respectively. Total volume of trades declined by 21.1% to 169.19 million units, valued at 1.13 billion and exchanged in 3,683 deals.
‘’Our outlook for equities in the short to medium term remains conservative, amidst brewing political concerns, and the absence of a positive trigger,’’ says analyst at Cordros Capital.
‘’However, stable macroeconomic fundamentals remain supportive of recovery in the long term.’’
The USD/NGN depreciated by 0.24% to NGN365.30 in the I&E FX window, while it closed largely flat at the parallel market at NGN362.00 respectively. Total turnover in the IEW declined sharply by 614.8% to USD29.38 million, with total trades consummated within the NGN365.50-360.00/USD band.
The overnight lending rate eased 525 bps to 14.92%, following inflows from matured OMO and treasury bills worth NGN424.51 billion and NGN84.45 billion respectively. The CBN mopped up NGN240.58 billion via OMO auction, selling NGN27.78 billion of the 91DTM, NGN42.01 billion of the 182DTM and NGN170.79 billion of the 364DTM, at respective stop rates of 11.90%, 13.50% and 15.00%.
Trading in the NTB secondary market was bearish, as average yield widened by 7 bps to 15.44%. Yields at the short (+8 bps), mid (+2 bps) and long (+9 bps) segments expanded, on the back of sell offs of the 70DTM (+125 bps), 147DTM (+30 bps) and 322DTM (+73 bps) bills, respectively.
Proceedings in the bond market were also bearish, as yield rose by 12 bps, on average, to 15.36%. Sell pressure was spread across the short (+7 bps), mid (+18bp) and long (+7 bps) segments with the JAN-2022 (+28 bps), MAR-2024 (+68 bps) and JUL-2034 (+20 bps) bonds recording respective expansions.-with CORDROS CAPITAL input.
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