Home Companies&Markets MARKETS BRIEF: Treasury bonds average yield expands by 7bps to 7.4% on...

MARKETS BRIEF: Treasury bonds average yield expands by 7bps to 7.4% on profit-taking pressure, naira drops 0.1% at the I&E window

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NSE Trading Floor

…NSE benchmark index advanced by 0.8% to 41,930.73 points following investors’ interests in bellwethers

WED 27 JAN, 2021-theGBJournal- The overnight lending rate inched higher by 25bps to 5.5%, as outflows on the day outweighed inflows from FGN bond coupon payments (NGN49.33 billion).

Trading in the NTB secondary market was mixed, as market participants anticipated renewed supply at the primary market. At the PMA, the CBN offered bills worth NGN187.29 billion with allotments of NGN11.39 billion of the 91-day, NGN47.48 billion of the 182-day and NGN123.11 billion of the 364-day – at respective stop rates of 0.55% (previously 0.50%), 1.30% (previously 1.00%), and 2.00% (previously 1.50%). At the OMO secondary market, average yield expanded by 29bps to 1.6%.

The Treasury bonds secondary market remained bearish, as average yield expanded by 7bps to 7.4%. Across the curve, average yield pared at the short (-1bp) end, following mild interest in the JAN-2022 (-3bps) bond, but expanded at the mid (+13bps) and long (+11bps) segments, due to profit-taking on the JUL-2030 (+21bps) and JUL-2034 (+32bps) bonds, respectively.

Equities

Bullish sentiments persisted in the domestic equities market, as the benchmark index advanced by 0.8% to 41,930.73 points following investors’ interests in bellwethers – MTNN (+2.4%), AIRTELAFRI (+1.1%) and WAPCO (+7.3%) stocks. Consequently, Month-to-Date and Year-to-Date returns increased to +4.1%.

The total volume traded increased by 16.2% to 543.60 million units, valued at NGN7.32 billion, and exchanged in 6,770 deals. TRANSCORP was the most traded stock by volume at 57.24 million units, while AIRTELAFRI was the most traded stock by value at NGN1.78 billion.

Performance across sectors was broadly positive as all sectors in our coverage save for the Oil & Gas (-0.1%) index recorded gains. The Insurance (+1.5%) index was the highest gainer, followed by the Industrial Goods (+0.5%), Banking (+0.3%) and Consumer Goods (+0.2%) indices.

Market sentiment, as measured by market breadth, was positive (1.7x), as 34 tickers gained, relative to 20 losers. CHIPLC (+10.0%) and GUINEAINS (+10.0%) topped the gainers’ list, while CORNERST (-9.7%) and CAVERTON (-9.4%) recorded the largest losses of the day.

Currency

The naira weakened by 0.1% to NGN394.25/USD at the I&E window and appreciated in the parallel market by 0.4% to NGN478.00/USD.-With Cordros Research

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