Nigerian stocks slip further midweek as sell-offs in FBN Holdings, UBA, ARDOVA drive market into red

By Charles Abuede

•  Investors lose N6.5 bn on lingering profit-taking activities

Negative investor sentiment further dominated Wednesday’s market performance as profit booking activities lingered while market investors lost N6.5 billion. Despite spates of selling pressure, market investors anticipate that a near-term bullish bias may dominate the trading activities as price declines across fundamentally sound counters present opportunities for them to take a position.

At the end of trading, the domestic equities market fell marginally by 4 basis points to close at 35,029.82 points due to sell-offs in FBN Holding (-0.7%), UBA (-0.6%) and ARDOVA (-8.7%). Consequently, investors lost N6.5 billion as market capitalisation declined to N18.3 trillion from N18.11 trillion the previous day while market year to date return moderated to 30.5 per cent.

Furthermore, market activity level was mixed as volume traded fell 8 per cent to 283.1 million units while value traded rose 4.5 per cent to N3.4 billion. The most traded stocks by volume were FBN Holding (40.8m units), GTB (32.7m units) and AIICO Insurance (30.1m units) while GTB (N1.1bn), Zenith Bank (N698.1m) and Dangote Cement (N308.7m) led by value.

Weak sector performance 

Also, there was a weak performance across sectors as 4 out of the 6 indices declined while the Industrial goods and AFR-ICT indices closed flat. The Insurance index led laggards, down 1.0 per cent due to sell-offs in Cornerstone Insurance (-3.3%), AXA Mansard (-0.9%) and AIICO Insurance (-0.9%). Similarly, the Oil & Gas and banking indices declined 0.4 per cent and 0.1 per cent respectively following price depreciation in ARDOVA (-8.7%), FBN Holdings (-0.7%) and UBA (-0.6%). Likewise, losses in Champion (-8.2%) dragged the Consumer Goods index 3 basis points lower.

Investor sentiment weakens

Investor sentiment as measured by market breadth (advance/decline ratio) weakened to 0.6x from the 0.8x recorded in the previous session as 13 stocks gained against the 21 that declined. FTNCOCOA (+8.8%), Union Development Company (+8.0%) and CHAMS (+4.8%) led the gainers while Royal Exchange (-8.7%), ARDOVA (-8.7%) and Mutual Benefit (-8.3%) led the decliners.

The NSE 30

The NSE 30 Index marginally decreased by 0.02 per cent to close at 1,457.82 points as against 1,458.08 points as on the previous day. Market turnover closed with a traded volume of 167.76 million units. FCMB and Zenith were the key gainers, while Sterling and Ecobank were the key losers.

Foreign Exchange

On Wednesday, the Naira took a breather at the Parallel FX market, gaining N5 against the greenback to settle at N478 to a dollar from the previous rate of N483 per dollar. At the I&E FX market, Naira appreciated by 0.08 per cent as the dollar was quoted at N394.67 as against the last close of N395 while most participants maintained bids between N382.00 and N408.18 per dollar.

Treasury Bills

In the T-bills market, yields trended to their highest level in nearly a month supported by strong bearish trades. On the back of sharp profit-taking, the average yield rose by 33 basis points to close at 0.45 per cent from 0.12 per cent on the previous day. Selling pressure was witnessed across short-term, medium-term, and long-term maturities with average yields rising by 34 basis points, 34  basis points, and 26  basis points, respectively. While at the Primary Market Auction (PMA) held on Wednesday, the CBN offered NT-Bills worth N50.93 billion across the 91-day (N4.41bn), 182-day (N7.82bn), and 364-day (N38.70bn) tenors.

In the OMO bills market, the average yield across the curve increased by 8 basis points to close at 0.45 per cent as against the last close of 0.37 per cent. Selling pressure was seen across short-term maturities with the average yield rising by 16 basis points. However, average yields across medium-term and long-term maturities closed flat at 0.44 per cent and 0.55 per cent, respectively. Yields on 10 bills advanced with the 22-Dec-20 maturity bill registering the highest yield increase of 33 basis points, while yields on 5 bills compressed with the 25-May-21 maturity bill recording the highest yield decline of 2 basis points.

Bonds market:

The Bond market extended its bear-run to the third consecutive session this week, as yields across the curve rose to average 4.4 per cent, compared to 4.3 per cent on the previous day. Across the tickers, investors sold the short end (+62 bps) and belly of the curve (+5 bps), even as the long end (-23 bps) was dominated by positive sentiment. The 23-MAR-2025 instrument (+216 bps) and 18-APR-2037 instrument (-122 bps) saw the biggest yield increase and yield decline, respectively.