Profit-takings in Large Cap Stocks Drag Market Performance

Profit-takings in Large Cap Stocks Drag Market Performance

Profit-takings in large cap or highly capitalised stocks drag the Nigerian stock market performance Tuesday ahead of the Central Bank of Nigeria’s primary market auction (PMA).

At the close of trade, the local bourse posted a negative performance due to sell-offs in DANGCEM (-4.0%), ETI (-4.7%), and FIDELITY (-2.9%).

As a result of sell-offs, the Nigeria’s equity benchmark index gave up some of the gains witnessed in yesterday’s session, following losses across some heavyweight names. Investors lost N118.4 billion due to sell-offs in large cap stocks.

So, the NSE All-Share Index dipped by 57 basis points to 39,267pts. Against that backdrop, year to date loss rose to 2.49%, while the market capitalisation declined to N20.545 trillion.

 On today’s price list, LIVESTOCK (+9.66% to N1.93), CORNERST (+9.09% to N0.60), and COURTVILLE (+9.09% to N0.24) were today’s top gaining stocks.

On the flip side, REGALINS (-9.09% to N0.30), PRESTIGE (-8.89% to N0.41), and DAARCOMM (-8.00% to N0.23) were today’s top losers.

Chapel Hill Denham said in a market report that performance across its coverage universe was mixed. Precisely, analysts at the firm said only 2 out of 5 coverage indices closed in the red terrain.

The NSE industrial goods and NSE insurance indices dipped by 190bp and 16bps, respectively. The foregoing masked the gains recorded across the NSE Banking and NSE consumer goods indices, both of which rose by 94bps and 7bps, respectively. The NSE Oil & gas index closed flat.

The market’s activity was broadly bearish, with the total volume moderating by 35.63% to 336 million, while the total value traded also declined by 69.31% to N3.269 billion.

Today’s most traded stocks by volume were UBN (79.89 million units), COURTVILLE (43.91 million units), and GUAR-ANTY (28.97 million units).

On the other hand, the top traded stocks by value were GUARANTY (N0.955 billion), ZENITHBANK (0.560 billion), and UBN (0.418 billion).

Elsewhere, the Chapel Hill Denham’s Paramount Equity Fund (PEF) and the Women Investment Fund (WIF) closed flat.

Discount Rates on T-Bills Eased

Discounts rates on Nigerian Treasury Bills (T-Bills), open market operations (OMO) bill eased as the fixed income market trade soft amidst sustained policy direction.

In the money market, funding pressures also eased as financial system liquidity opened higher at N328.2 billion from N87.6 billion previously.

This was driven by OMO inflows estimated at N169.2 billion. Against this backdrop, the Open Buy Back (OBB) and Overnight (O/N) rates declined by 5.7% and 5.8% to 6.33% and 7.17% respectively.

On Tuesday, analysts at Chapel Hill Denham noted the Nigerian fixed income market traded largely flattish in view of uncertainty in monetary policy.

In the bills market, discount rates on the NTB and OMO benchmark curves eased by an average of 6 basis points (bps) and 5bps to 3.82% and 6.10% respectively.

However, the benchmark bond yield curve expanded by a marginal 1bp, as upward repricing at the short end of the curve (+8bps to 8.21%) was largely offset by few interest at the long end of the curve (-3bps to 11.67%).

Given the hawkish tilt of the MPC at the committee meeting which held last week, we expect the duration apathy in the bond market to persist over the near term, Chapel Hill Denham said.

Analysts expect a rollover Nigerian Treasury Bill auction is scheduled to hold on Wednesday, with N95.7bn on offer, across 91-day (N10 billion), 182-day (N17.6 billion) and 364-day (N68.1 billion) tenors.

Recalled that the last auction cleared at 2.0%, 3.5% and 7.0% respectively as analysts expect the upcoming auction to clear slightly higher.

In the Investors and Exporters Window, the Naira strengthened further against the USD, albeit marginally by 3bps or 13 kobo to 409.00. In the parallel market, the local currency weakened by 1.00 or 0.2% against the USD to 485.00.

However, the foreign exchange rate remained unchanged in the official and Secondary Market Intervention Sale (SMIS) segments at 379.00 and 380.69 respectively.

External reserves maintained the recent upward trend, strengthening marginally by 0.6% above the previous week to US$34.8 billion.

Profit-takings in Large Cap Stocks Drag Market Performance