The market opened for three trading days last week as the Federal Government of Nigeria declared Monday June 17 and Tuesday June 18, 2024, as Public Holidays to commemorate 2024 Eid el Kabir celebrations.
A total turnover of 3.301 billion shares worth N53.157 billion in 27,536 deals was traded in the week by investors on the floor of the Exchange, in contrast to a total of 2.633 billion shares valued at N43.652 billion that exchanged hands in the preceding week in 33,709 deals.
The Financial Services Industry (measured by volume) led the activity chart with 3.040 billion shares valued at N46.362 billion traded in 13,695 deals; thus contributing 92.12 percent and 87.22 percent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 74.051 million shares worth N867.880 million in 1,906 deals. The third place was the ICT Industry, with a turnover of 44.909 million shares worth N1.412 billion in 2,136 deals.
Trading in the top three equities namely Fidelity Bank Plc, FBN Holdings Plc and Veritas Kapital Assurance Plc (measured by volume) accounted for 2.469 billion shares worth N37.405 billion in 3,006 deals, contributing 74.80 percent and 70.37 percent to the total equity turnover volume and value respectively.
The Nigerian equities market could not consolidate the gains of the prior week following pressure from profit-taking activities during the week. Accordingly, the NGX ASI declined marginally by 0.2 percent w/w, driven by losses in TRANSCOHOT (-10.0%) and MTNN (-2.7%).
Based on the preceding, the month-to-date and year-to-date returns settled at +0.4 percent and +33.4 percent, respectively.
Commenting on the performance of the market in the period and speaking on the outlook for this week, stock market analysts at Cordros Research said, “We still expect the domestic bourse to exhibit a choppy trading pattern next week as the lack of significant positive catalysts fuels investors’ cautious stance. In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and corporate actions.”
Similarly, sentiments in the FGN bonds secondary market were mixed in the review week, as players exited their short and long positions, while huge demand was recorded on the privately issued MAR-2027 (-100bps) bond.
As a result, the average yield increased slightly by 1bp to 18.8 percent. Across the benchmark curve, the average yield expanded at the short (+6bps) and long (+14bps) ends following profit-taking activities on the JAN-2026 (+20bps) and JUN-2038 (+96bps) bonds, respectively. Conversely, the average yield declined at the mid (-9bps) segment due to interest in the APR-2032 (-16bps) bond.
Capital market experts believe the outcome of this month’s FGN bond auction holding on Monday (24 June) will influence the direction of yields in the secondary market.
“At the auction, the DMO is set to offer instruments worth NGN450.00 billion through re-openings of the 19.30% FGN APR 2029, 18.50% FGN FEB 2031 and 19.89% FGN MAY 2033 bonds.
Meanwhile, we maintain our medium-term expectation of elevated yields consequent to (1) anticipated monetary policy administration globally and domestically, and (2) sustained imbalance in the demand and supply dynamics,” the experts said.
Meanwhile, the global equities were broadly positive amid a series of central bank decisions and US economic data releases, including retail sales and jobless claims. US equities (DJIA: +1.4%; S&P 500: +0.8%) were on track for a weekly gain, as of the time of writing, propelled by a rally in tech stocks earlier in the week and growing expectations of interest rate cuts in response to disappointing retail sales and jobless claims data.
European equities (STOXX Europe: +1.3%; FTSE 100: +1.5%) also rebounded from last week’s loss, buoyed by positive reactions to improved UK retail sales numbers as recently released by the Office for National Statistics (ONS), and the latest interest rate decisions from the Bank of England and Swiss National Bank.
However, the Asian markets were negative, with both Japanese (Nikkei 225: -0.6%) and Chinese (SSE: -1.1%) markets closing lower on concerns over the normalization of the Bank of Japan’s monetary policy following the cooler-than-expected May inflation (2.5%), and uncertainties surrounding policy support for the Chinese economy amid trade frictions with the European Union. Elsewhere, the Emerging (MSCI EM: +1.8%) and Frontier (MSCI FM: +0.6%) market indices posted gains underpinned by India (+0.2%) and Romania (+2.3%), respectively.
