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MARKETS BRIEF: Treasury bonds stays bearish on buying interests as average yield expands by 1bp to 6.5%, Naira gains 0.2%

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NSE Trading Floor

…Positive sentiments persists in the domestic equities market for the third consecutive trading session

WED 13 JAN, 2021-theGBJournal- The Treasury bonds secondary market remained bearish, as the average yield expanded slightly by 1bp to 6.5%. Across the curve, the average yield pared at the short (-1bp) end, following buying interests in the JAN-2022 (-1bp) bond, and expanded at the long (+3bps) end due to profit-taking on the APR-2037 (+19bps) bond. Average yield was flat at the mid segment.

At the Money Market, the overnight lending declined by 150bps to 2.0%, in the absence of any significant outflows from the system.

The NTB secondary was bearish, as average yield expanded by 3bps to 0.5%. Across the curve, average yield expanded at the short (+11bps) and mid (+1bp) segments due to sell-offs of the 29DTM (+17bps) and 106DTM (+3bps) instruments, respectively; the long end was flat. Similarly, average yield expanded by 2bps to 0.8% at the OMO secondary market.

At the Foreign Exchange market, the naira strengthened by 0.2% to NGN393.33/USD and NGN474.00/USD at both the I&E window and parallel market, respectively.

Meanwhile, positive sentiments persisted in the domestic equities market for the third consecutive trading session, following interests in FLOURMILL (+6.9%), MOBIL (+9.4%) and WAPCO (+1.4%) stocks. Pertinently, the benchmark increased by 0.1% to 40,341.05 points. Accordingly, Month-to-Date and Year-to-Date gains both increased to 0.2%.

The total volume traded declined by 59.9% to 468.15 million units, valued at NGN6.96 billion, and exchanged in 5,697 deals. ZENITHBANK was the most traded stock by volume at 45.77 million units, while MTNN was the most traded stock by value at NGN2.25 billion.

Performance across sectors was positive, as all indices in our coverage – Insurance (+4.1%), Oil & Gas (+1.7%), Consumer Goods (+0.1%), Industrial Goods (+0.1%) and Banking (+0.1%) – recorded gains.

Market sentiment, as measured by market breadth, was positive (2.1x), as 31 tickers gained, relative to 15 losers. ACADEMY (+10.0%) and SOVRENINS (+10.0%) topped the gainers’ list, while LIVESTOCK (-9.7%) and CHIPLC (-8.8%) recorded the largest losses of the day.

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