Local bourse contracted last week after a significant bullish momentum in the preceding week. With the loss on all the 5 trading days of the week, the All-Share Index (ASI) declined by 2.57% WoW to close at 34,136.82 while market capitalizations shed N470.61bn to settle at N17.84tn. Consequently, the year-to-date (YtD) performance moderated to +27.18%.
Market breadth, a measure of Investors’ sentiment declined from 5.75x to 0.30x as 21 stocks advanced while 69 stocks declined last week. BOCGAS (+39.88%), TRIPPLEG (+19.57%) and NEM(+17.27%) were the top market gainers while CORONATION (-21.51%), OANDO (-19.75%) AND JAPAULOIL(-18.18%) top the losers chart.
Market activity level waned as the value of transaction traded declined by -38.89% while volume advanced by 152.77% majorly as a result of an off-market transaction in the shares of UACPROP on Tuesday. Trading in the shares of UAC- Property Development Company Plc, Transnational Corporation of Nigeria Plc and Jaiz Bank Plc accounted for 9.259 billion shares worth N6.639 billion in 1,958 deals, contributing 81.22% and 18.50% to the total equity turnover volume and value respectively.
Outlook for the week
In reaction to the GDP and inflation report last week and investors response to the banking stocks financial results. We expect the extension of the bearish sentiment to the new week as repricing continues.
Nigerian Fixed Income Market
The bonds market traded on a mixed note as yield advanced on short term instrument while that of medium and long term maturities compressed. Notably, the yield on FGN bond JUL-2021 advanced by 26.21% to close at 0.23% while that of JUL-2030 compressed by 6.52%% to settle at 4.39%.
From the bond primary auction held on 18th November 2020, CBN offered N40.00 bn for each of the 14 years and 24 years FGN bond. The auction however witnessed heavy subscription with a bid to cover ratio of 2.19 and 2.43 respectively. All bid awarded at (Price/yield) settled at 176.14 and 152.40.
The US S&P 500 and Dow Jones indices both declined by 0.73% and 0.77% following higher reported cases of COVID-19. Other global stocks however advanced marginally as German Dax and UK FTSE advanced by 0.46% and 0.56% while French CAC and Japan NIKKEI both advanced by 2.14% and 0.56% respectively. Pressure from increasing cases of COVID-19 and new lockdowns across cities in Europe are expected to moderate the mood of the markets this week.