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Markets Wrap: Stocks fall after Monday’s gain as investors sell-off large caps, Bonds return bullish

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NSE Trading floor

TUE, JULY 28 2020-theG&BJournal– The Nigerian Stock Exchange (NSE) All-Share Index declined 0.54% to close Tuesday at 24,650.16 points, as a slew of companies report earnings.

Selloffs across large caps such as MTNN (-1.7%), GUARANTY (-3.0%), TOTAL (-9.9%), JBERGER (6.25%) and SEPLAT (-9.8%) dragged the market to its largest decline in three weeks (July 6th, 2020).

Total volume of trade declined by 11.5% to 150,398,795.00 units valued at NGN1.98 billion and exchanged in 3,780 deals. MBENEFIT was the most traded stock by volume at 26.92 million units while MTNN was the most traded stock by value at NGN939.53 million. 14 stocks posted gains while 17 stocks declined.

The Insurance (+0.4%) index was the sole gainer, while the Oil & Gas (-5.2%), Banking (-0.5%) and Consumer Goods (-0.1%) indices declined. The Industrial Goods index closed flat.

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

Currency

The naira depreciated by 0.1% to NGN389.50/USD at the Investors’ and Exporters’ window after positive gains Monday. The low liquidity witnessed last week in the window persisted during today’s trading session. At the parallel market it ended the day flat at NGN475.00/USD.

The Central Bank of Nigerian (CBN) is still being expected to intervene in the foreign exchange market with funds in the invisibles and SME segment.

Money Market & Fixed Income

NTB secondary market was mixed with minimal trades despite the elevated system liquidity. Market The market however, anticipates supply from the PMA tomorrow. Thus, average yield was flat at 1.8%. On the other hand, average yield contracted by 4bps to 4.4% at the OMO secondary market on the back of low rates.

The Treasury bond secondary market was bullish, as average yield pared by 4bps to 7.0%. Across the curve, yield contracted at the short (-16bps) end, following demand for the JAN-2022 (-45bps) bond, while they expanded at the mid (+1bp) and long (+4bps) segments, as investors sold off the JUL-2030 (+3bps) and JUL-2034 (+13bps) bonds, respectively.

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