Profit Taking Wipes Off ₦49.6 Billion from Stock Market

Market Brief: Equities Prices Trend Strongly on Bullish Run

Equities prices trend strongly as the bulls tightened grip on the Nigerian Stock Exchange, pushing it to positive territory on all trading days last week.

It was a full week of bullish performance  as equities prices surged. Then, Unilever stock emerged as the best performing stock, gained 33.86% to close at ₦17.

The All Share Index advanced by 5.59% to settle at 25,204.75 percentage points.

In contrast, ARBICO topped the losers’ chart, shedding 9.91% to close at ₦2.09 compare to other segment where equities prices increased.

All sectoral indices closed up the week with the Industrial goods (+15.24%) and Banking sector (+7.24%) indices recording the most gain.

Meanwhile, the Federal High court has granted an order sanctioning the Scheme of Arrangement for the demutualization of the NSE.

Also, the National Bureau of Statistics reported an increase of 12.34% in the Consumer Price Index for the month of April from 12.26% in March.

In the primary bond auction held this week, investors’ appetite remained robust, evidenced by strong bid-to-cover ratios across tenors.

Meristem said mixed sentiments, however, trailed the secondary market for fixed income instruments.

Average yields in the treasury bills market advanced slightly by one basis point to 2.67%, while average yields in the bonds market declined to 10.40%.

Similarly, the mid and long term instruments recorded 12 and 10 basis points decline in yields respectively.

Last week oil prices sustained its bullish momentum, up 6.9% week on week to US$34.75 bbl.

However, on Friday, oil prices moderated due to doubts over the strength of China’s economic recovery and rising tensions between Washington and Beijing.

However, the external reserves further advanced, up 2.2% or $755 million to $35.7 billion from $34.9 billion in the previous week.

In the foreign exchange market, the CBN spot rate traded flat all week to close at ₦361.00/$1.00.

Afrinvest stated that at the parallel market, the exchange rates opened at ₦455.00/$1.00 and closed at ₦460.00/$1.00, depreciating ₦5.00 kobo week on week.

Meanwhile, at the Investors’ & Exporters’ (I&E) Window, the NAFEX rate opened at ₦387.10/$1.00 and closed at ₦385.94/ $1.00 on Friday.

Thus, it appreciated ₦0.06 kobo week on week from ₦386.00/$1.00 in the prior week.

Activity level in I&E Window rose 7.5% to $175.6 million from $163.3 million recorded in the previous week.

At the FMDQ Securities Exchange (SE) FX Futures Contract Market, Afrinvest said total value of open contracts of the Naira settled at $15.5 billion.

This translated to an increase of $96.7 million or +0.6% from $15.4 billion in the prior week.

The MAY 2021 instrument of contract price ₦423.06 received the most buying interest in the week with additional subscription of $25.6 million which took total value to $255.1 million.

On the other hand, the MAY 2020 instrument of contract price ₦389.70 received sell-offs worth $3.5 million bringing the total value to $2.5 billion.

“We expect stronger FX demand due to the easing of lockdown across major economies to put pressure on the exchange rate in the near term”, Afrinvest stated.

In the money market, the open buy back (OBB) and overnight (OVN) rates opened this week lower at 1.83% and 2.33% respectively, from 2.80% and 3.40% at the end of the previous week as system liquidity rose to ₦590.7 billion from ₦423.2 billion.

Despite the moderation in system liquidity to ₦497.3 billion on Wednesday, the OBB and OVN rates decreased to 1.67% and 2.17% respectively from 1.90% and 2.30% (on Tuesday).

Afrinvest said on Thursday, the OBB and OVN rates trended lower to 1.42% and 2.00% respectively as system liquidity rose to ₦539.4 billion.

Lastly, OBB and OVN rates jumped to close the week at 15.00% and 15.63% respectively while system liquidity increased to ₦567.3 billion.

Meanwhile, at the treasury bills secondary market, investors recorded gains as average yield moderated 24bps to settle at 2.14%.

Across all instruments, the 91-day note recorded the strongest buying interest with its yield dropping 60 bps to 1.34%.

Analysts stated that there was also buying interest in the 182 and 364 days assets respectively as their respective yield fell to 2.10% and 3.00% respectively from the previous week’s close of 2.16% and 3.07%.

“In the coming week, we expect money market rates to trend lower especially as maturing OMO instrument worth ₦305.7 billion is expected to hit the market, supporting high system liquidity”, Afrinvest remarked.

Average Yield on Nigerian Treasury Bills Closed Flat at 0.44%

In the bond market, the Debt Management Office conducted a bond auction offering instruments worth ₦60 billion on Wednesday with an equal split among the 3-year, 15-year and 30-year instruments.Equities prices

Due to the high system liquidity level, the instruments recorded massive subscriptions.

Market Brief: Equities Prices Trend Strongly on Bullish Run