By Charles Abuede
The Nigerian domestic equities market closed positive on Wednesday with a continued upward trend as the benchmark index advanced by 125 basis points to 34,769.00 points, following buying interest in Dangote Cement (+2.6%), Airtel Africa (+1.9%) and Dangote Sugar (+5.9%). Consequently, investors gained N223.9 billion as market capitalisation rose to N18.16 trillion while year to date return improved to 29.5 per cent.
Similarly, market activity level strengthened as volume and value traded increased by 19.0 per cent and 47.4 per cent to 434.9 million units and N6.9 billion respectively.
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The most traded stocks by volume were Transnational Corporation (84.5 million units), Zenith Bank (59.2 million units) and Access Bank (29.9 million units) while Dangote Cement (N2.2 billion), Zenith Bank (N1.5 billion) and Guaranty Trust Bank –GTB– (N768.5 million) led by value.
Bullish sector performance
Performance across sectors was bullish as 5 of 6 indicators closed in the green. The banking and industrial goods indices gained, up 1.6 per cent apiece, due to buying interest in Zenith Bank (+1.7%), GTB (+1.2%), Dangote Cement (+2.6%) and WapCo Plc (+3.4%).
Similarly, the insurance and AFR-ICT indices rose 1.4 per cent and 1.0 per cent respectively, following price appreciation in AXA Mansard (+9.8%) and Airtel Africa (+1.9%). Also, price uptick in Flour Mill (+9.8%) and Guinness Plc (+2.9%) drove the consumer goods index higher by 0.7 per cent. Conversely, sell-offs in OANDO (-6.6%) dragged the oil & gas index lower by 0.6 per cent.
Investor sentiment strengthens
Investor sentiment as measured by market breadth (advance/decline ratio) rose to 3.4x from the 1.6x recorded previously as 37 stocks gained against the 11 that declined. May & Baker (+10.0%), UPDCREIT (+9.9%) and Eterna Plc (+9.9%) led the top gainers while Trans Express (-9.4%), ABC Transport (-8.6%) and Cornerstone Insurance (-7.9%) led the decliners.
The NSE 30
The NSE 30 index rose by 1.24 per cent to close at 1,482.56 points as against 1,464.47 points on the previous day. Market turnover closed with a traded volume of 261.93 million units. Flour Mills and FCMB were the key gainers, while International Breweries and UBN were the key losers.
At the parallel market, the naira resumed its downward trend, depreciating N4 to trade at N487 to a dollar while at the I&E FX market, it depreciated significantly by 2.01 per cent as the dollar was quoted at N393.25 as against the last close of N385.50. Most participants maintained bids between N382 and N394.83 per dollar.
As investors seek to place their unmet bids into the treasury bills market due to the abundant system liquidity, the NT-Bills secondary market closed on a positive note, with the average yield across the curve declining by 1 basis point to close at 0.10 per cent from 0.11 per cent on the previous day. Buying interest was seen across long-term maturities with the average yield falling by 1 basis point. However, the average yields across short-term and medium-term maturities remained unchanged at 0.06 per cent, and 0.09 per cent, respectively.
At the Primary Market Auction held Wednesday, the CBN offered NT-Bills worth N130.60 billion across the 91-day (N20.37 billion), 182-day (N19.16 billion), and 364-day (N91.07 billion) tenors.
Meanwhile, in the OMO bills market, the average yield across the curve remained unchanged at 0.15 per cent. Mild selling pressure was seen across long-term maturities with the average yield rising by 1 basis point. However, average yields across short-term and medium-term maturities both closed flat at 0.15 per cent each.
Given the abundant system liquidity and expected robust liquidity, the FGN bonds secondary market closed on positive note midweek, as the average bond yield across the curve cleared lower by 15 basis points to close at 1.62 per cent from 1.77 per cent on the previous day. Average yields across short tenor and medium tenor of the curve compressed by 20 basis points and 6 basis points, respectively; while the average yield across long tenor of the curve advanced by 1 basis point.
The 27-JAN-2022 maturity bond was the best performer with a decline in yield of 76 basis points, while the 26-APR-2049 maturity bond was the worst performer with an increase in yield of 10 basis points.