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Markets Wrap: Coronavirus concerns send stocks tumbling to a new record low, Naira weakens 0.04% at the I&E FX window and Yields expanded across board

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NSE Trading floor

MON, MARCH 09 2020-theG&BJournal-The Nigerian bourse fell by 2.4% to 25,647.54 points –largest decline since 12th September 2019— as investors reacted to falling crude oil prices and the continued spread of the corona virus. Consequently, the Month-to-Date return (-2.2%) turned negative, as Year-to-Date loss also increased to -4.5%.

The total volume of trades decreased by 48.6% to 185.65 million units, valued at NGN1.83 billion and exchanged in 2,690 deals. ZENITHBANK was the most traded stock by volume and value at 53.51 million units and NGN907.08 million respectively.

All sectors indices closed negative with the Banking (-9.0%) index recording the largest loss following declines in the Tier I names. The Consumer Goods (-2.5%), Insurance (-2.4%), Oil & Gas (-1.4%), and Industrial Goods (-0.01%) indices all followed suit.

Market sentiment, as measured by market breadth, was negative (0.0x), as 38 tickers lost, relative to 1 gainer. UCAP (-10.0%) and UNILEVER (-10.0%) topped the loser’s list, while only CHIPLC (+10.0%) gained.

CURRENCY

The naira was flat at NGN360.00/USD in the parallel market, while it weakened by 0.04% to NGN366.71/USD at the I&E FX window.

MONEY MARKET & FIXED INCOME

The overnight lending rate expanded by 356bps to 16.4% driven by the still strained system liquidity. Precisely, the CBN funded for its wholesale, Invisibles and SMEs FX auctions.

Trading in the NTB secondary market was flat as investors steered clear of the unattractive yields in the space. However, average yield expanded in the OMO secondary market by 165bps to 14.7 as foreign investors continue to sell-off following corona induced fears and decline in oil prices.

The Treasury bond secondary market remained bearish, as average yield expanded by 26bps to 10.3%. Yields expanded across the short (+7bps), mid (+48bps), and long (+24bps) segments of the curve, following selloffs of the JAN-2022 (+28bps), JAN-2026 (+242bps), and APR-2037 (+95bps) bonds respectively. With Cordros Research

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