BY BAMIDELE FAMOOFO
It was a bearish outing for the equities market last week as the Nigerian bourse sustained its previous week’s bearish close with a 3.10 percent week on week decline in the benchmark index and market capitalization despite the positive close on Friday as equities investors continues prowling for clues on the sustainability of corporate earnings being churned out.
Notably, there were pressured sell-offs in UCAP with share price dropping by 20percent while MTNN lost 17 percent in share price.
JAPAULGOLD lost 22 percent, AIICO, (-16%); and TRANSCORP, (-14%); in that order as market investors lost N868.03 billion from the five sessions. Accordingly, there was a recorded dip in the All-Share Index and Market Capitalization by 3.10 percent w/w from last week’s 0.45 percent to close at 50,370.25 points and N27.16 trillion respectively. For the meantime the year to date return moderated to 17.92 percent and still below the inflation rate.
Also, the performance of the sectorial gauges tracked all traded in the south week on week as the NGX Insurance Index and NGX Consumer Goods indexes closed the week in the negative at 4.96 percent and 3.44 percent w/w. Trailing were the NGX Oil/Gas Index, NGX Banking Index and NGX Industrial Index which recorded losses by 0.95 percent, 0.43 percent and 0.22 percent respectively on a w/w comparison. Elsewhere, the level of trading activity during the week was upbeat as the total traded volume and value increased by 68.51 percent and 10.03 percent w/w to 1.55 billion units valued at N16.29 billion.
Meanwhile, deals for the week under review closed at 23,867 from 19,513 in the prior week. In the new week, we expect the market to trade in a mixed sentiment as the unimpressive macro story remains a headwind to market performance for the moment amid the continued earnings releases. Also, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook.
In the bond market, the FGN Eurobond traded bullish on renewed positive sentiment in the review week. In the review week, the value of FGN bonds traded in the mixed bag for most of the maturities tracked. Specifically, the 10-year, 16.29 percent FGN MAR 2027 instrument was bullish, closing the week at N115.87 as the yield declined 0.17 percent from the previous week while the 20-year 16.25 percent FGN APR 2037 remained flat at N124.70 and its yield unchanged at 12.53 percent from last week’s close.
However, the 15-year 12.50 percent FGN APR 2035 debt instrument declined N1.25 to close at N98.70 ( from N99.95) and the yield closed at 12.70 percent (from 12.50%) and then the 30-year 12.98 percent FGN MAR 2050 bond tanked by N0.10 to N98.70 from N98.80, while it yields closed at 13.49 percent (from 13.14%).
Furthermore, the value of FGN Eurobonds traded during the week at the international debt capital market performed appreciably for all maturities tracked on renewed positive investors’ sentiment.
Consequently, the 10-year, 6.375 percent JUL 12, 2023 bond, the 20-year, 7.69 percent FEB 23, 2038 paper and the 30-year, 7.62 percent NOV 28, 2047 debt paper close the week in the northern region as their yields declined to 8.55 percent (from 9.44%), 13.32 percent (from 13.50%) and 12.57 percent (from 12.75%) respectively.
In the new week, analysts expect the value of FGN Bonds to increase further (and yields to fall) amid increased demand due to the forthcoming FGN Bonds Auction by the Debt Management Office.
