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MARKETS Wrap: Equities plunge again on close of trade as coronavirus concerns pervade, bond yield expanded 35bps to 10.7%, Naira weakens at the parallel market

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Nigeria stock exchange
Nigeria stock exchange

TUE, MARCH 10 2020-theG&BJournal- The Nigerian domestic market continued its free fall as fears around the coronavirus and lower oil prices continue to compound already negative investor sentiment. Consequently, the All Share index fell by 4.9% to 24,388.66 points – the largest single-day decline since falling 8.4% on March 19, 2010. Thus, the Month-to-Date and Year-to-Date losses increased to -7.0% and -9.1%, respectively.

The total volume of trades increased by 220.3% to 594.55 million units, valued at NGN4.21 billion and exchanged in 4,010 deals. UBA was the most traded stock by volume at 166.42 million units while GUARANTY was the most traded stock by value at NGN1.09 billion respectively.

Sectoral performance remained negative with all sector indices recording declines. The Banking (-12.5%) index took the biggest hit as investors continue to sell down on Tier I names. The Consumer Goods (-4.4%), Insurance (-2.9%), Industrial Goods (-1.1%) and Oil & Gas (-0.9%) indices all followed suit.

Market sentiment, as measured by market breadth, was negative (0.1x), as 33 tickers lost, relative to 3 gainers. NASCON (-10.0%) and MTNN (-10.0%) topped the laggards list, while NEIMETH (+10.0%) and HONYFLOUR (+3.5%) led the gainers.

CURRENCY

The naira weakened by 0.6% to NGN362.00/USD in the parallel market, while it remained flat at NGN366.71/USD at the I&E FX window.

MONEY MARKET & FIXED INCOME

The overnight lending rate contracted by 202bps to 14.4% in the absence of any significant outflows.

Trading in the NTB secondary market remained flat as investors shifted focus towards tomorrow’s NTB PMA. However, average yield expanded in the OMO secondary market by 17bps to 14.9% as foreign investor selloffs persisted. At the NTB primary auction tomorrow, the CBN is expected to offer c. NGN70 billion worth of bills across all tenors.

The Treasury bond secondary market traded bearish in today’s trading session, as average yield expanded by 35bps to 10.7%. Yields expanded across the short (+58bps) and long (+56bps) ends of the curve, following selloffs of the JUL-2021 (+131bps) and JUL-2034 (+75bps) bonds respectively. However, yields contracted at the mid (-6bps) segment following buying interest in the APR-2029 (-28bps) bond.-Courtesy Cordros Research

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