Downward Trajectory Persists In The Local Bourse

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Local Bourse Starts the Week in Red, NGX ASI Dips 29bps
Local Bourse Starts the Week in Red, NGX ASI Dips 29bps

At the end of yesterday’s trading session, the Nigerian equities market closed negative as the benchmark index decreased by 0.31% to close at 47,057.24 points.

 

Yesterday`s performance was a result of selloffs of bellwether stocks such as BUAFOODS (-4.04%) and MTNN (-1.01%). Consequently, the YTD return declined to 10.16% as market capitalisation decreased by ₦78.75 billion to close at ₦25.36 trillion.

 

The sectoral performance marginally strengthened as three of the five indices under coverage improved. The Insurance index, the biggest gainer improved by 2.35% on NEM (+9.97%). The Oil and Gas and Consumer goods indices followed suit, increasing by 0.89% and 0.04% on ARDOVA (+1.57%) and FLOURMILL (+2.57%) respectively. The Banking and Industrial indices, the losers, declined by 0.17% and 0.01% on UBA (-0.58%) and CUTIX (-3.61%).

 

Investor sentiment weakened as the market breadth decreased to 0.87x from 1.00x. This was illustrated by the advance of 18 stocks, led by PRESCO (+10.00%) and NEM (+9.97%) and the decline of 21 stocks, led by COURTVILLE (-7.27%) and UPDC (-5.56%). Activity level weakened as the total volume and value decreased by 16.55% and 1.84% respectively as investors exchanged about 238.22 million units of shares worth over ₦5.09 billion.

Downward Trajectory Persists In The Local Bourse - Brand Spur

We expect positive sentiment to return in the next trading session as the equities market still presents decent opportunities for investors chasing positive real returns on investments.

 Fixed Income

There was relatively bearish sentiment across the bond yield curve as 2 of the 4 bond yields under coverage closed higher, the yield on the FGN-MAR-2024 closed flat while the FGN-APR-2023 compressed by 1bp. The yields on the FGN-JAN-2026 and FGN-JUL 2030 bond papers increased by 30bps and 56bps respectively.

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Treasury bill yields for the 182-day paper decreased by 83bps to close at  4.38% while the 91-day and 364-day papers closed flat at 4.04% and 5.51% respectively.

 

 We expect a further decline in yields in the next trading session on the back of huge demand from investors and the deliberate efforts of the DMO to reduce borrowing costs.

MARKET SNAPSHOT

  • Downward Trajectory Persists in the Local Bourse, NGX ASI Sheds 31bps
  • Bearish Sentiment across the Bond Yield Curve
  • Negative Sentiment in Global Stocks
  • Brent Crude Reports at $90.31/barrel
  • Mixed Performance in African Stocks