Stock Market Lost N571bn as CBN Spot Rates Rise
The Nigerian stock market lost about N571 billion across five trading sessions as equities investors sold off their shareholdings amidst earning releases by listed companies.
The sustained selloffs have plunged the market return downward from the peak level seen earlier in the year due to low investor sentiment. Institutional investors have been trading exits following the CBN interest rate hikes which necessitated spot rate repricing in the primary market auctions.
Some selloffs by asset managers driven by yield repricing in the fixed income market have been dragging the equities space downward despite relatively robust earnings performance by listed companies.
In the just concluded week, the apex bank sold Nigerian Treasury bills worth N150.62 billion to mop up all matured treasury bills, with stop rates rising for all tenor buckets.
At the primary market auction for roll-over sum, the CBN’s spot rate on 91-day treasury bills was re-priced to 3.50%, up 70 basis points from 2.80% at the midweek primary market auction.
Mid-tenored instruments, 812-day Treasury bills were sold at 4.50%, up 40 basis points from 4.10%. The long-tenored instrument, the 364-day bill was up 45 basis points to 7.45% as investors bid in tandem with increased rates.
Meanwhile, the yields in the secondary market turned northwards. Stockbrokers’ said profit taking on major bellwethers dragged the Nigerian Exchange All Share Index lower 2.1% last week from the previous position to 49,664.07 points.
Accordingly, year-to-date return moderated further to 16.3% from 18.7% in the previous week while market capitalisation dipped from ₦570.8 billion to ₦26.8 trillion on Friday’s close.
Elsewhere, the level of trading activity during the week was in a varied region as the total traded volume advanced 114.12% week on week to 1.51 million units.
The total weekly traded value decreased by 45.49% week on week to N6.12 billion and then the total deals for the week dipped (-5.03%) to 20,412 from 21,494 in the previous week
Mostly, there were increased sell-offs seen during the week in CUTIX, BUA Cement Plc, Stanbic IBTC, Transcorp and MTN Nigeria Plc.
Trading data shows that CUTIX was down by 15% in a week of trading, BUACEMENT lost 10% and STANBIC IBTC dropped 10% of its market valuation. Also, TRANSCORP shed 7% while MTNN was priced down by 5%. READ: Stocks Dip as Local Bourse Sees Worst Bearish Sessions in Months
By sector, it was a mixed performance as NGX Insurance gained 6.00% and NGX Consumer Goods (+3.00%) closed the week positive. On the contrary, NGX Banking declined by 0.89%, NGX Industrial Goods went down by 5.19% and NGX Oil and Gas dipped by 0.37% in the week against the prior week. # Stock Market Lost N571bn as CBN Spot Rates Rise
