Tier-1 Banks’ Selloffs Halt Momentum in Nigerian Exchange
Selloffs in Tier-1 banks – Zenith Bank, UBA, Access Holdings Plc halted momentum in the Nigerian stock market as investors reacted to disinflation ahead of the monetary policy committee decision on interest rate later in the month.
The market has seen significant re-rating across key sectoral indices as pension fund administration flood the local bourse with pension money chasing risky assets.
Stockbrokers reported that the Nigerian Exchange (NGX) All-share index (ASI) declined by -0.47% to close at 189,321.24 index points.
The decline was driven by profit taking in heavyweight tickers such as ZENITHBANK (-10.00%), UBA (-6.56%), ACCESSCORP (-4.63%), WAPCO (-4.04%), and MTNN (-3.81%), among others.
The losses were offset by gains recorded in VITAFOAM (+8.26%), BUAFOODS (+5.77%), PRESCO (+3.03%), NAHCO (+2.55%) and NESTLE (+2.47%), among others
The market recorded a turnover of ₦60.19 billion, as 1.19 billion shares exchanged hands in 86,607 deals, reflecting solid liquidity and continued investor confidence.
Month-to-date (MTD) and Year-to-date (YTD) returns closed at +14.48% and +21.66% respectively, reflecting sustained investor optimism and the market’s resilience.
In terms of Volume ACCESSCORP came top with 86.72m, followed by ZENITHBANK 93.10m, JAPAULGOLD 73.79m, and FIRSTHOLDCO 54.32m while for Value ZENITHBANK (₦8.00bn) came tops, followed by ARADEL (₦5.59bn), MTNN (₦5.05bn), and VITAFOAM (₦4.55bn).
The latest pull back in today’s trading session presents opportunities for bargain hunters to take positions in fundamentally sound stocks.
The market anticipates sa cautious trading session on Wednesday and stockbrokers said they expect the market to retain its bullish momentum in the interim supported by corporate action announcements and improved liquidity on the back of the National Pension Commission’s (PENCOMs) decision to revise investment limits for ordinary shares in RSA Funds I, II, III, and VI-Active which supports positive market sentiment.
System liquidity moderated as expected, albeit remaining relatively robust, closing today’s trading session at an estimated net long position of ₦3.39 trillion compared with ₦4.68 trillion recorded the previous day.
The moderation was partly driven by debits from the latest OMO auction which absorbed approximately ₦1.35 trillion from the system.
Consequently, the overnight funding rate (O/N) expanded by +1bp to close at 22.80%, while the open repo rate (OPR) remained firm at 22.50% respectively.
The secondary market for NTB closed bullish as average benchmark yield declined by -4bps to close at 17.54%.
This was driven by renewed demand for the 352DTM (-44bps). Similarly, proceedings in the secondary market for OMO closed bullish as average yield declined by -1bp to close at 20.58%.
