The Nigerian equities market last week snapped a four-week losing streak, as renewed buying interest in banking stocks lifted the benchmark index of the Nigerian Exchange Limited to close the last trading day of March on a positive note.
Market analysis from Cordros Securities Limited attributed the market’s positive performance gains in GTCO and ZENITHBANK, following the release of the respective companies’ 2024 full-year audited financial statements and accompanying dividend announcements during the week.
The two equities recorded 18.2 percent and 3.1 percent gains on their share price respectively by the close of the week under review.
Consequently, the NGX All-Share Index appreciated by 0.66 percent week on week (w/w) to close at 105,660.64 points up from 104,962.96 points recorded the previous week.
Similarly, the market capitalisation advanced by 0.66 percent to N66.257 trillion up from N65.820 trillion in the corresponding week to enable investors to gain N437 billion during the week.
Hence, month-to-date and year-to-date returns settled at -2.0 percent and +2.7 percent, respectively.
Further analysis of the market activity showed robust trading, as both volume and value increased by 161.5 percent w/w and 743.1 percent w/w, respectively.
A total turnover of 7.521 billion shares worth N398.949 billion in 61,312 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.902 billion shares valued at N48.064 billion that exchanged hands previous week in 57,044 deals.
The Industrial Goods led the activity chart with 4.923 billion shares valued at N331.999 billion traded in 2,969 deals; thus contributing 65.46 percent and 83.22 percent to the total equity turnover volume and value respectively.
The Financial Services industry followed with 2.092 billion shares worth N 31.744 billion in 32,421deals.
Third place was the Services Industry, with a turnover of 198.775 million shares worth N788, 669 million in 3,450 deals.
Trading in the top three equities namely Lafarge Africa Plc, Sovereign Trust Insurance Plc and Cutix Plc (measured by volume) accounted for 5.546 billion shares worth N332.381 billion in 1,300 deals, contributing 73.73 percent and 83.31 percent to the total equity turnover volume and value respectively.
Forty-three (43) equities appreciated in price during the week, higher than thirty-two (32) equities in the previous week. Thirty-six (36) equities depreciated in price, lower than forty eight (48) in the previous week, while seventy-one (71) equities remained unchanged, lower than seventy (70) recorded in the previous week.
Projecting the market activities for the new week, Cordros Market analyst says, “we expect choppy trading to persist in the holiday-shortened week, with potential bouts of profit-taking in recent gainers alongside renewed bargain hunting in beaten-down names.”
During the week under review, the FGN bond secondary market was bullish, with the average yield declining by 3bps to 18.7 percent.
Market analysts attributed it to secondary market bids by investors who lost out on the auction amid the sizable non-competitive allotment of N152.45 billion or 36.0 percent of total allotment.
Across the benchmark curve, the average yield decreased at the short end (-34bps) following demand for the MAR-2027 (-43bps) bond, while it advanced at the mid (+8bps) and long (+20bps) segments driven by selloffs of the APR-2032 (+15bps) and MAR-2035 (+48bps) bonds, respectively.
At Monday’s PMA, the DMO offered instruments worth N300.00 billion to investors through re-openings of the 19.30 percent FGN APR 2029 (Bid-to-offer: 0.3x; Stop rate: 19.00 percent) and 18.50 percent FGN MAY 2033 (Bid-to-offer: 4.7x; Stop rate: 19.99 percent) bonds. Total subscription levels settled at N530.31 billion as against the previous rate of N1.63 trillion, with a bid-to-offer ratio of 1.8x (previous: 4.7x).
Eventually, the DMO allotted instruments worth NGN423.68 billion across the two tenors, resulting in a bid-to-cover ratio of 1.3x.
Similarly, the Treasury bills secondary market was bearish during the week, driven by market participants who sold off bills in expectation of higher stop rates at the primary market auction.
Consequently, the average yield expanded by 85bps to 21.7 percent. Across the market segments, the average yield advanced by 15bps and 168bps to 19.4 percent and 24.2 percent in the NTB and OMO segments, respectively.
At Wednesday’s NTB auction, the CBN offered bills worth N700.00 billion – N80.00 billion for the 91D, N120.00 billion for the 182D, and N500.00 billion for the 364D bills. Subscription level settled higher at N1.43 trillion compared to previous auction at N902.04 billion, with a bid-to-offer ratio of 2.0x (previous auction: 1.1x).
The auction closed with the DMO allotting N808.73 billion – N38.65 billion for the 91D, N24.27 billion for the 182D, and N745.80 billion for the 364D papers – at respective stop rates of 18.00 percent (unchanged), 18.50 percent (unchanged) and 19.63 percent lower than the previous rate of 19.94 percent.