The Nigerian equities market dipped further as the benchmark index declined by 0.22% to 28,422.76 points, driven by sell-offs in NESTLE and FBNH.
Thus, the Month-to-Date and the Year-to-Date losses increased to -2.53% and -9.57% respectively. On sectoral performance, losses in Consumer Goods (-1.68%) and Industrial Goods (-0.57%) indices neutered the gains in the Banking (+1.29%), Oil & Gas (+0.68%), and Insurance (+0.02%), indices. Notable stocks include NESTLE (-3.48%), WAPCO (-2.73%), GUARANTY (+1.94%), MOBIL (+5.45%), and AIICO (+3.03%), respectively. Market breadth was positive, with 20 gainers and 16 losers, led by NEIMETH (+9.09%) and UPL (-9.73%) shares, respectively. Total volume of trades declined by 6.80% to 200.07 million units, valued at NGN2.69 billion, and exchanged in 3,600 deals.
In the absence of a positive catalyst, we guide investors to trade cautiously in the short term. However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the medium-to-long term.
The USD/NGN appreciated by 0.08% to NGN360.53 in the I&E FX window, while it closed flat at NGN360.00 at the parallel market. Total turnover in the IEW decreased by 54.95% to USD165.41 million, with trades consummated within the NGN357.50-NGN361.80/USD band. The overnight lending rate declined by 407 bps to close at 12.64% as market players were able to access liquidity from the CBNs SLF window. Activities in the treasury bills market were bullish, as average yield compressed 6 bps to close at 12.80%. Buy sentiment was spread across the short (-3 bps), mid (-9 bps), and long (-5 bps) segments, with respective yields on the 30DTM (-32 bps), 184DTM (-38 bps), and 233DTM (-39 bps) bills expanding. At the NTB auction scheduled for tomorrow the CBN will offer NGN33.84 billion – NGN3.38 billion of the 91-day, NGN16.92 billion of the 182-day, and NGN13.54 billion of the 364-day – worth of bills to the market.
Trading in the bond market was mixed, with a bearish tilt, as average yield expanded by 3 bps to close at 14.14%. Sell pressure was spread across the mid (+8 bps) and long (+8 bps) segments, with respective yields on the FEB-2028 (+14 bps) and JUL-2034 (+10 bps) bonds expanding. Conversely, demand for the JUN-2019 (-29 bps) bond led to yield contraction at the short (-3 bps) end of the curve.