The Nigerian stock market saw mixed sentiment during the week ended November 8, 2024, culminating in a slight decline of 0.20% week-on-week in the NGX All-Share Index which closed at 97,236.19 points.
The move takes the index further away from the 100,000-point mark, reflecting investor caution amid ongoing economic challenges and policy shifts by both the fiscal and monetary authorities.
The week was marked by fluctuating trading patterns across sectors, with the Industrial and Consumer Goods indices particularly impacted.
Investors remained on edge due to concerns over inflation, fuel price hikes, and the potential effects of fiscal policies on critical sectors.
As the ASI dipped, the market capitalisation followed suit, also decreasing by 0.20 percent to settle at N58.92 trillion, erasing N118.40 billion from investors’ portfolios. This decline comes amid ongoing portfolio rebalancing and position-taking.
Year-to-date, however, the ASI has still posted a 30.04 percent return.
The broader market saw more decliners than gainers, with 42 stocks losing value compared to 31 gainers.
This reflects the broader sentiment of caution among investors in light of economic uncertainties.
Despite this overall weak performance, some sectors outperformed the broader market.
The NGX-Oil & Gas sector gained 5.43 percent, driven by strong performances from stocks like CONOIL, while the NGX-Banking sector rose by 2.81 percent, buoyed by gains in ACCESSCORP, ETI, and STERLING.
The NGX-Insurance and NGX-Consumer Goods sectors also saw marginal gains of 0.11 percent and 0.02 percent, respectively, led by positive movements in stocks such as SOVEREIGN TRUST INSURANCE and MAY & BAKER.
On the flip side, the NGX-Industrial Goods sector experienced notable sell-offs, with stocks like ABBEY BUILDERS, BETA GLASS, UPDC, and CUTIX showing weak price movements, reflecting negative sentiment in the sector.
Market activity reflected a mix of high and low momentum across stocks of varying capitalisations.
The number of trades increased by 4.2 percent week-on-week, reaching 48,801 deals. Additionally, the trade value surged by 38.7 percent to N75.75 billion, while the traded volume saw a significant 138.1 percent increase, reaching 6.47 billion shares.
Several stocks were the top weekly advancers, drawing strong investor interest. These included EUNISELL up by 46 percent, JOHN HOLT by 46 percent, CONOIL by 37 percent, SOVRENINS by 21 percent, and CONSOLIDATED HALLMARK INSURANCE by 15 percent.
Conversely, the top decliners included ABBEY BDS losing 18 percent, DEAP CAPITAL 14 percent, TANTALIZER 13 percent, MEYER 10 percent, and ETERNA 10 percent.
Experts predict that mixed sentiment is expected to persist as portfolio rebalancing continues, but noted that despite the recent downturn, a near-term rebound is anticipated, although investor sentiment is expected to remain cautious.
The release of October’s Consumer Price Index figures by the National Bureau of Statistics could further weigh on market sentiment, with persistent inflationary pressures and potential currency volatility keeping investors on the edge.
As a result, they advised investors to focus on fundamentally sound stocks while remaining mindful of broader economic conditions.
Trading activities on the Treasury bills secondary market in the week ended November 8, 2024 enjoyed bullish sentiments as the average yield across all instruments declined by 12 basis points (bps) to 24.9 percent.
Market experts have attributed the performance to participants looking to fill unmet bids at this week’s NTB PMA.
Across the market segments, the average yield dipped by 26bps to 24.0 percent in the NTB segment but increased by 11bps to 26.3% in the OMO segment.
At Wednesday’s NTB auction, the DMO offered N513.43 billion – N20.75 billion for the 91 days, N5.44 billion for the 182 days and N487.24 billion for the 364 days bills, an initiative described by some market experts as worth of instruments to investors.
Aggregate subscription settled higher at N669.93 billion (bid-to-offer: 1.3x), compared to the previous auction (N489.84 billion | bid-to-offer: 1.3x).
Eventually, the DMO allotted N626.33 billion – NGN14.00 billion for the 91 days, N3.40 billion for the 182 days and N608.93 billion for the 364 days papers, at respective stop rates of 18.00 percent higher than 17.00 percent, 18.50 percent 17.50 percent previously and 23.00 percent, 20.65 percent for each segment previously.
Also, the CBN conducted an OMO auction on Tuesday offering instruments worth N300.00 billion – N25.00 billion for the 95 days, N25.00 billion for the 179 days and N250.00 billion for the 365 day, to investors.
Total subscription settled at N1.45 trillion (bid-to-offer: 4.8x), with the CBN allotting exactly what was demanded at the long end at a stop rate of 24.28% (unchanged), with no sales at the short and mid segments.
Similarly, proceedings in the FGN bond secondary market were bullish as the average yield declined by 8bps to 19.4 percent. Experts attributed this to the surplus interbank liquidity at the start of the week.
Across the benchmark curve, the average yield decreased at the short (-23bps) end following demand for the APR-2025 (-66bps) bond, but expanded at the mid (+16bps) segment driven by sell pressures on the FEB-2031 (+40bps) bond. The average yield closed flat at the long end.
It is, however, envisaged that a possible upward repricing of bonds may happen this week, as it is expected that participants will sell off their positions in anticipation of higher yields.
Nevertheless, some market expect maintains their stands that short-term expectation of elevated yields consequent on anticipated monetary policy administration globally and domestically, and sustained imbalance in the demand and supply dynamics.
