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MARKETS BRIEF: Treasury bonds stays bearish as average yield expands by 20bps to 6.5%, naira sells at N475/$ in the parallel market

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…Equities sustain gains

TUE 12 JAN, 2021-theGBJournal- The Treasury bonds secondary market continued to trade with bearish sentiments, as the average yield expanded by 20bps to 6.5%. Across the curve, the average yield was flat at the short end, but expanded at the mid (+3bps) and long (+47bps) segments, following profit-taking on the JUL-2030 (+12bps) and MAR-2036 (+86bps) bonds, respectively.

At the MONEY MARKET, The overnight lending expanded by 25bps to 3.5%, following funding for CBN’s FX Invisibles and SMEs auctions.

Trading in the NTB secondary was mixed, as market participants anticipate renewed supply from the CBN at tomorrow’s PMA. Thus, the average yield was flat at 0.5%. On the other hand, average yield declined by 5bps to 0.8% at the OMO secondary market.

The naira weakened by 0.2% to NGN394.00/USD at the I&E window but stayed flat at NGN475.00/USD in the parallel market.

Meanwhile, the Nigerian bourse extended yesterday’s gains, as buying interests in DANGCEM (+2.2%), MANSARD (+9.6%) and NASCON (+10.0%) stocks supported a 0.4% gain in the All-Share Index to 40,295.95 points. As a result, Month-to-Date and Year-to-Date return both increased to +0.1%.

The total volume of trades increased by 247.5% to 1.17 billion units, valued at NGN7.97 billion, and exchanged in 5,591 deals. MANSARD was the most traded stock by volume at 49.51 million units, while MTNN was the most traded stock by value at NGN679.10 million.

Sectoral performance was mixed, as the Insurance (+3.6%), Industrial Goods (+1.0), and Consumer Goods (+0.4%) indices recorded gains, while the Banking (-0.6%) and Oil & Gas (-0.1%) indices declined.

Market sentiment, as measured by market breadth, was positive (1.3x), as 26 tickers gained, relative to 20 losers. MBENEFIT (+10.0%) and NASCON (+10.0%) recorded the largest gains of the day, while OANDO (-5.4%) and DEAPCAP (-4.8%) topped the losers’ list.

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