By Charles Abuede
Profit-taking in Nigeria’s domestic equities market saw investors maintain their bearish stance on Tuesday as sell-offs in the large-cap counters such as Dangote Cement (-6.5%), Nestle Plc (-3.5%) and Nigerian Breweries (-6.9%) shrank the benchmark index lower by 1.6 per cent to 34,242.83 points. Consequently, investors lost N277.6 billion as market capitalisation declined to N17.9 trillion, while year to date return moderated to 27.6 per cent.
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Meanwhile, activity level was mixed as volume traded rose by 25.8 per cent to 840.8 million units while value traded declined by 22.8 per cent to N6.1 billion. The most traded stocks by volume were Jaiz Bank (304.7million units), Transnational Corporation (95.9million units) and FBN Holding (82.4million units) while Zenith (N1.2billion), Guaranty Trust Bank – GTB – (N791.8million) and FBN Holding (N613.8million) led by value.
Weak sector performance
Market performance across sectors was bearish as 4 of the 6 indicators closed southward. The banking index was the lone gainer, up 0.8 per cent following price appreciation in GTB (+2.8%), Ecobank (+4.1%) and UBN (+1.8%). On the flip side, there were losses in industrial goods (3.3%), consumer goods (3.2%) and oil & gas (3.1%) indices, respectively due to profit-taking in Dangote Cement (-6.5%), Nestle (-3.5%) and OANDO (-10.0%). Likewise, the insurance and AFR-ICT indices declined 0.5 per cent and 1 basis point respectively, driven by sell pressures in WAPIC (-10.0%) and CHAMS (-7.7%).
Investor sentiment strengthens
Investor sentiment as measured by market breadth (advance/decline ratio) rose to 0.6x from the 0.3x recorded previously as 17 stocks gained against the 30 that declined. Boc Gas (+10.0%), Glaxosmith (+9.6%) and Conoil (+9.4%) led the top gainers while Oando (-10.0%), WAPIC (-10.0%) and Portland Paint (-10.0%) led the decliners.
The NSE 30
The NSE 30 index decreased by 1.75 per cent to close at 1,468.59 points, as against 1,494.79 points that was recorded in Monday’s trading. Market turnover closed with a traded volume of 327.32 million units. Dangote Sugar and Ecobank were the key gainers, while Nigerian Breweries and International Breweries were the key losers.
With the expected bi-weekly FX auction by the CBN aimed at pressuring the liquidity levels downward, the naira traded flat at N475 to a dollar in the FX parallel market while at the Importers’ &Exporters’ FX market, the naira appreciated by 0.31 per cent as the dollar was quoted at N384.80 as against the last close of N386. Most participants maintained bids of between N381 and N392.80 per dollar.
Treasury Bills Market
Given the low yield environment, appetite remained subdued as the NT-Bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 0.11 per cent. Average yields across short-term, medium-term, and long-term maturities closed at 0.06 per cent, 0.09 per cent, and 0.15 per cent, respectively.
Also, in the OMO bills market, the average yield across the curve declined by one basis point to close at 0.12 per cent as against the last close of 0.13 per cent. Buying interest was seen across short-term maturities with the average yield falling by 2 basis points. However, average yields across medium-term and long-term maturities remained unchanged at 0.10 per cent and 0.14 per cent, respectively. The highest yield increase was witnessed in the 15-Dec-20 maturity bill, which rose by 7 basis points, while the highest yield decline was seen in the 8-Dec-20 maturity bill, which fell by 16 basis points.
Meanwhile, ahead of the DMO’s primary market auction scheduled for Wednesday, the FGN bonds secondary market closed on a positive note Tuesday, as the average bond yield across the curve cleared lower by 4 basis points to close at 1.68 per cent from 1.72 per cent on the previous day. Average yields across short tenor and medium tenor of the curve fell by one basis point and 16 basis points, respectively; while the average yield across long tenor increased by one basis point. The 26-APR-2029 maturity bond was the best performer with a decline in yield of 39 basis points, while the 27-MAR-2035 maturity bond was the worst performer with an increase in yield of 19 basis points.