Home Companies&Markets Markets Wrap: Equities retreat 0.93%, Treasury yield contracts 4bps to 8.0% and...

Markets Wrap: Equities retreat 0.93%, Treasury yield contracts 4bps to 8.0% and naira sells at N461.00/USD

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Nigeria stock exchange
Nigeria stock exchange

MON, JULY 06 2020-theG&BJournal-Negative sentiments dominated trading in the domestic bourse, as profit-taking in BUACEMENT (-5.0%), NESTLE (-6.5%) and AIRTELAFRI (-3.5%) drove the market lower. Thus, the All-Share Index declined by 1.3% to 24,026.05 points. Accordingly, Month-to-Date and Year-to-Date losses increased to -1.9% and -10.5%, respectively.

The total volume of trades increased by 31.4% to 189.69 million units, valued at NGN2.78 billion and exchanged in 4,216 deals. GUARANTY was the most traded stock by volume and value at 60.47 million units and NGN1.28 billion, respectively.

Sector performance was broadly negative following losses in the Consumer Goods (-3.2%), Industrial Goods (-2.4%) and Oil & Gas (-0.04%) indices. The Banking (+1.5%) and Insurance (+1.1%) indices closed positive.

Market sentiment, as measured by market breadth, was negative (0.8x), as 17 tickers declined, relative to 14 gainers. BETAGLAS (-10.0%) and JBERGER (-9.8%) were the top losers of the day, while CORNERST (+10.0%) and NAHCO (+10.0%) recorded the largest gains.

Currency

The naira weakened at the I&E window by 0.1% to NGN386.50/USD while it was flat at the parallel market at NGN461.00/USD.

Money Market and Fixed Income

The overnight lending rate contracted by 250bps to 21.0%, amid the still thin system liquidity.

Activities in the NTB secondary market were mixed, as average yield pared by 1bp to 2.1%. Across the curve, yields expanded slightly at the short (+1bp) end, following sell-off of the 87DTM (+5bps) instrument, while they contracted at the long (-4bps) end, due to demand for the 220DTM (-15bps) instrument; yield at the mid segment was flat. Elsewhere, average yield expanded by 3bps to 5.2% at the OMO secondary market.

Trading in the Treasury bond secondary market was bullish, as average yield contracted by 4bps to 8.0%. Across the curve, yield contracted at the short (-9bps) and mid (-1bp) segments, driven by demand for the JAN-2022 (-31bps), and APR-2029 (-1bp) bonds, respectively; yield at the long end was flat.

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