Sentiment in the Nigerian equities market turned negative last week, buoyed by investors’ reaction to the Central Bank of Nigeria’s decision to maintain the Monetary Policy Rate at 27.5%, alongside profit-taking in recent outperformers and a shift in capital flows toward the fixed income market.
As a result, the All-Share Index declined by 0.62% week-on-week (w/w) to 109,028.62 points, driven by losses in TRANSCOHOT (-15.0%), MTNN (-2.9%), TRANSCORP (-4.4%), ACCESSCORP (-8.1%) and FIDELITYBK (-10.3%).
Market activity was predominantly bearish, with only a brief rebound on May 20. Key sell-offs included NB (-5.10%), OANDO (-3.00%), MTNN (-1.82%), and NNFM (-9.97%), as investors repositioned ahead of month-end.
Consequently, month-to-date and year-to-date returns moderated to +3.1% and +5.9%, respectively. Despite the bearish tone, trading volume and value increased by 43.2% and 11.0% w/w, respectively.
Meanwhile, sectoral performance was mixed, as the Oil & Gas (-3.4%) and Banking (-1.5%) indices declined, while the Consumer Goods (+2.2%), Insurance (+0.7%), and Industrial Goods (+0.7%) indices advanced.
30 advancers vs. 22 decliners raised breadth to 1.36x (up from 0.67x). This divergence where breadth and volume improve despite index decline often signals underlying accumulation and could foreshadow a short-term rebound, particularly if macro signals stabilizes.
New listing
During the week, Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF or the Fund) listed additional 229,316 units the Daily Official List of Nigerian Exchange Limited, with the additional units, the Fund has now increased from 1,055,514,831 to 1,055,744,147 units.
Similarly, United Bank for Africa listed additional 6,839,884,274 ordinary shares of 50 Kobo each listed on the Daily Official List of Nigerian Exchange Limited.
The new units are proceeds of Rights Issue which closed on Tuesday, November 5, 2024.
With this listing of the additional 6,839,884,274 ordinary shares, the total issued and fully paid-up shares of United Bank for Africa Plc has now increased from 34,199,421,368 to 41,039,305,642 ordinary shares of 50 Kobo each.
NASD OTC Exchange
The NASD Securities Index rose by 0.97% to 3,188.8 points, driven by notable price appreciations in key tickers like CSCS (+8.46%), FrieslandCampina WAMCO (+5.53%), and 11 PLC (+2.11%). These gains reflect renewed investor confidence in fundamentally strong, dividend-paying companies within the OTC space.
While total trade volume dropped by 14.80% to 385,519 units, the value of transactions skyrocketed by 892.24% to N14.78 million, indicating significant high-value block trades. The 105.88% jump in executed deals further signals a broadened participation and increased liquidity concentration in premium-tier equities.
Global Equities
Risk-off sentiment returned to the global equities market this week, as investors grappled with persistent uncertainty over trade negotiations, heightened concerns about the U.S. fiscal outlook, and mixed signals from economic data and corporate earnings.
At the time of writing, US equities (DJIA: -2.5%; S&P 500: -2.9%) were on track for their worst weekly performance since April 18, pressured by fears that a new fiscal bill featuring tax cuts with increased defense spending could exacerbate the federal deficit.
Market sentiment was further dented by renewed trade tensions after President Trump threatened a 50.0% tariff on European Union goods starting June 1 and a 25.0% tariff on any iPhones manufactured outside the US.
Similarly, European equities (STOXX Europe 600: -0.8%; FTSE 100: +0.3%) dropped lower late in the week, as early optimism from strong earnings was overshadowed by growing global trade risks.
Elsewhere, Asian equities (Nikkei 225: -1.6%; SSE: -0.6%) declined, pressured by mounting concerns over the US fiscal outlook and the slowest pace of growth in Japan’s exports in recent quarters, as rising tariffs begin to take a toll on demand.
Lastly, the Emerging Markets index (MSCI EM: -0.6%) edged lower, reflecting losses in China (-0.6%), while the Frontier Markets index (MSCI FM: +1.9%) advanced, supported by strong performances in Vietnam (+0.9%) and Romania (+5.0%).
Money market and fixed income
The overnight rate declined by 4bps w/w to 26.9%, as inflows from OMO maturities (N1.14 trillion) and FGN bond coupon payments (N17.87 billion) offset debits for the OMO PMA (N655.25 billion) and net NTB issuance (N115.80 billion). Accordingly, the average system liquidity improved, settling at a net long position of N646.50 billion (vs a net long position of N230.04 billion in the previous week).
Treasury bills
The Treasury bills secondary market traded with bullish sentiments, underpinned by the (1) liquidity influx, and (2) market participants looking to fill unmet bids from the PMAs this week. Consequently, the average yield across all instruments declined by 31bps to 23.4%.
Across the market segments, the average yield declined by 5bps and 38bps to 20.8% and 26.5% in the NTB and OMO segments, respectively. At Wednesday’s NTB auction, the CBN offered bills worth N500.00 billion – N50.00 billion for the 91D, N100.00 billion for the 182D, and N350.00 billion for the 364D bills.
Total subscription levels settled higher at N1.17 trillion (previous auction: N1.09 trillion), indicating a bid-to-offer ratio of 2.3x (previous auction: 2.0x). The auction closed with the CBN over-allotting to the tune of N615.80 billion – N71.67 billion for the 91D, N41.13 billion for the 182D, and N503.00 billion for the 364D papers – at respective stop rates of 18.00% (unchanged), 18.50% (unchanged) and 19.56% (previous: 19.63%).
The CBN also conducted an OMO auction on Tuesday (20 May), offering instruments worth N500.00 billion – N250.00 billion for the 182D and N250.00 billion for the 210D. Total subscription settled at NGN743.25 billion (bid-to-offer: 1.5x), with the CBN allotting N655.25 billion – N117.50 billion for the 182D and N537.75 billion for the 210D at respective stop rates of 23.77% and 23.98%.