BY BAMIDELE FAMOOFO
Investors in the Nigerian stock market made away with about N702.71 billion in the trading week ended January 13, 2023 with market index inching higher by 2.52 percent week on week.
Market capitalization also closed the week at N28.60 trillion as year-to-date returns rose to 2.46 percent.
After the deterioration reported the previous week, the benchmark index rose in the review week by 2.52 percent week on week to 52,512.48 points on the back of strong demand across the banking, industrial and oil and gas sectors.
This comes as investors continue to bet on the equities in wait for the outcome of the next monetary policy meeting this week.
The unpredictability of the domestic bourse stayed again last week as the composite NGX All-Share index bounced back to close higher in the midst of increasing buy power and strong momentum, in spite of the seeming profit-taking activities in some medium and low stocks at the close of last week. The rebound was driven by position-taking in dividend-paying companies as fourth-quarter and full-year earnings begin to take centre stage this January in the face of positive sentiment and market breadth.
These are expected to come alongside the December consumer price index in the week to give direction and influence the flow of liquidity in the economy.
It was a bullish close for most of the sectors under our purview except for the Insurance index which closed bearish and declined by 1.64 percent week on week. On the other hand, positive price movements and pressured demand in GTCO, ZENITH BANK, ACCESS CORP and FIDELITYBNK drove the banking index by 3.48 percent gain week on week and was followed by the Industrial Goods index which gained 3.34 percent due to demand strong buys in DANGCEM, WAPCO and BUACEM this week.
Also, renewed buying triggers in TOTAL, ARDOVA and CONOIL drove gains in Oil and Gas by 3.19 percent and then the Consumer Goods Index gained 0.68 percent week on week and was buoyed by price appreciations in MTNN, PZ AND UNILEVER.
The buying pressure stayed strong across the board and supported the benchmark index’s trading above the 200-Day Moving Average on a daily and weekly time frame due to positive sentiments.
Resultantly, market activities were on the bull trend as the total deals for the week jumped 27.02 percent to 19,816 this week as stockbrokers recorded a 39.45 percent increase in trade volumes to 1.29 billion and valued at N29.63 billion indicating an increase of 93 percent week on week.
At the money market, the Nigerian Treasury bills secondary market remained bullish as the average yield across all instruments contracted by 7bps to 3.3 percent.
Experts attributed the week’s performance to higher demand following (1) the healthy system liquidity and (2) market participants moving to the secondary market to compensate for lost bids at Wednesday’s NTB PMA. Across the market segments, the average yield contracted by 9bps to 3.3 percent at the NTB secondary market, but was flat at 3.4 percent at the OMO segment.
At last week’s NTB auction, the CBN offered bills worth NGN56.93 billion – NGN1.55 billion of the 91-day, NGN1.49 billion of the 182-day, and NGN53.90 billion of the 364-day – to market participants.
Demand was higher, especially for the 364-day T-bills, as the total subscription settled at NGN389.04 billion.
Eventually, the CBN allotted exactly what was offered at respective stop rates of 2.00 percent (previously 2.75%), 4.33 percent (previously 7.15%), and 7.30 percent (previously 8.49%).
Proceedings in the FGN bonds secondary market turned bearish in the review week, following selloffs of instruments across the curve as investors still await clarity on the FGN’s intended borrowing for Q1-23.
That said the average yield across all instruments expanded by 11bps to 12.8 percent.
Across the benchmark curve, the average yield dipped at the short (-4bps) end as investors demanded the APR-2032 (-87bps) bond, but expanded at the mid (+9bps), and long (+28bps) segments following profit-taking on the APR-2032 (+16bps) and MAR-2050 (+40bps) bonds, respectively.
On the outlook, experts expect the positive sentiment to continue in the new week as investors continue to position ahead of the December consumer price index from the NBS and the releases of the fourth quarter earnings by corporates.
However, investors are advised to continue to trade on companies’ stocks with sound fundamentals.