Domestic equities market reverses uptrend amid profit-taking as index drops by 1.89%

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FINANCIAL MARKET ECONOMY
  • Naira gains 0.04% at the I&E window

BY BAMIDELE FAMOOFO

The local bourse All-Share Index dropped by 1.89 percent to 50,868.52 points amid renewed profit-taking activity, particularly on Airtel Africa Plc, (-8.26%), NAHCO (-3.90), NGXGROUP (- 3.60), Sterling Bank Plc, (-2.10), and FBN Holding Plc, (-0.45) shares.

Consequently, the year-to-date gain of the local bourse slipped into negative territory at -0.75 percent despite the bulls (20) outnumbering the bears (16).

Performance for most sub-sectors was bullish, as three of the five sub-indices closed positive: the NGX Banking, the NGX Consumer Goods, and the NGX Oil/Gas indices rose by 0.88 percent, 1.33 percent, and 0.09 percent, respectively.

On the flip side, the NGX Insurance index moderated by 0.97 percent, while the NGX Industrial index remained relatively unchanged from the previous day. Meanwhile, trading activity mellowed, with the total number of deals, volume, and value decreasing by 11.62 percent, 47.80 percent, and 86.49 percent, respectively, to 3,673 trades, 138.72 million units, and N1.83 billion.

In terms of volume, Sterling Bank Plc, was the most active stock, with 29.15 million shares worth N41.01 million changing hands in 57 deals.

Meanwhile, at the foreign exchange market, the Naira appreciated against the greenback at the I&E windows, gaining 0.04 percent to N461.50 (from N461.67). Furthermore, the parallel market rate rose by 0.14 percent to N739 from N740.

At the money market, NIBOR declined across the board for all of the maturities tracked as banks with liquidity sought lower rates. Short-term benchmark rates, on the other hand, such as the open repo rate (OPR) and the overnight lending rate (OVN), remained stable at 9.50 percent and 9.83 percent, respectively.

Meanwhile, NITTY fell across the board for all tenor buckets tracked, even as the average secondary market T-bill yield fell to 3.64 percent on sustained buy pressure, notably on longer-dated maturities.

In the OTC bond market, the prices of plain vanilla FGN bonds remained flat for most maturities monitored. In contrast, the average secondary market fell 2bps to 12.70 percent. Notably, the yields on the 10-year, 15-year, 20-year, and 30-year bonds were unchanged from the previous trading day at 12.60 percent, 13.50 percent, 14.43 percent, and 14.00 percent, respectively. Elsewhere, the value of the FGN Eurobond decreased for all of the maturities tracked as bearish sentiment crept in. Consequently, the average secondary market yield increased by 4 bps to 11.45 percent as investors digested the US Federal Reserve’s hawkish comments.