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Markets Wrap: All sectors indices close positive, NTB yields contracts by 6bps to 4.0% and Naira weakens at the I&E FX window

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WED, MARCH 04 2020-theG&BJournal- Sentiments remained positive on the domestic bourse, with the benchmark index rising by 0.6% to 26,415.54 points, as bargain hunting continue across Tier I banking stocks – ACCESS (+6.5%) and FBNH (+9.7%). Consequently, the Month-to-Date return (+0.8%) turned positive, while Year-to-Date loss moderated to -1.6%.

However, the total volume of trades decreased by 20.7% to 307.72 million units, valued at NGN2.81 billion and exchanged in 4,419 deals. FBNH was the most traded stock by volume at 50.25 million units, while ZENITHBANK was the most traded stock by value at NGN966.29 million.

All sectors indices closed positive — Insurance (+2.8%), Banking (+1.7%), Consumer Goods (+0.82%), and Industrial Goods (+0.37%) indices – save for the Oil & Gas index which declined by 0.7% following a selloff in ARDOVA (10.0%).

Market sentiment, as measured by market breadth, was positive (2.3x), as 21 tickers gained, relative to 9 losers. NEM (+10.0%) and ROYALEX (+10.0%) topped the gainer’s list, while ARDOVA (-10.0%) and DEAPCAP (-10.0%) recorded the largest declines.

CURRENCY

The naira was flat at NGN360.00/USD in the parallel market, while it weakened by 0.1% to NGN366.31/USD at the I&E FX window.

MONEY MARKET & FIXED INCOME

The overnight lending rate contracted by 25bps to 15.2% in the absence of any significant outflows from the system.

Trading in the NTB secondary market remained bullish as average yield contracted by 6bps to 4.0%. Yields contracted at the long (-36bps) end following buying interest in the 239DTM (-61bps) instrument, while they expanded at the mid (+64bps) segment as market players sold off on the 134DTM (+154bps) instrument. Yield at the short segment was flat. Additionally, in the OMO secondary market, average yield expanded by 18bps to 12.2%.

The Treasury bond secondary market remained bearish, as average yield expanded by 15bps to 9.5%. Yields expanded across the short (+10bps), mid (+24bps), and long (+8bps) segments of the curve, following selloffs of the MAR-2024 (+37bps), JUL-2030 (+29bps), and JUL-2034 (+35bps) bonds respectively.-Courtesy Cordros Research

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