BY BAMIDELE FAMOOFO
The NGX All-Share Index and Market Capitalization depreciated by 0.23 percent and 0.26 percent to close the week at 46,842.86 and N25,253 trillion respectively.
Market capitalization dropped by about N58billion, declining from N25.31 trillion as the week ended March 25, 2022 to about N25.25 trillion in the week ended April 1, 2022.
Bearish sentiments persisted in the local bourse for the third consecutive week as profit-taking activities dominated market performance with the benchmark index recording losses in three of the five trading sessions.
Notably, selloffs of TOTALENERGIES (-10.0%), NB (-9.1%), INTBREW (-8.1%), GTCO (-7.1%) and ZENITHBANK (-7.1%) drove the weekly loss.
Based on the preceding, the MTD and YTD return printed -0.3 percent and +9.7 percent, respectively. Activity levels were mixed, as trading volumes increased by 9.6 percent w/w while trading value declined by 18.4 percent w/w.
Performance across sectors was largely bearish, following losses in the Banking (-7.1%), Oil and Gas (-3.4%), Consumer Goods (-1.8%), Insurance (-0.3%), and Industrial Goods (-0.1%) indices.
A total turnover of 1.289 billion shares worth N13.546 billion in 22,118 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.176 billion shares valued at N16.601 billion that exchanged hands in the previous week in 21,076 deals.
The Financial Services Industry (measured by volume) led the activity chart with 851.598 million shares valued at N7.516 billion traded in 11,930 deals; thus contributing 66.07 percent and 55.49 percent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 174.588 million shares worth N569.028 million in 1,095 deals. The third place was The ICT Industry, with a turnover of 77.571 million shares worth N2.249 billion in 1,458 deals.
Trading in the top three equities namely Fidelity Bank Plc, Transnational Corporation Of Nigeria Plc, and Access Holdings Plc (measured by volume) accounted for 426.566 million shares worth N1.777 billion in 3,307 deals, contributing 33.10 percent and 13.12 percent to the total equity turnover volume and value respectively.
The weak sentiments that dominated the local bourse last week is expected to persist in the week ahead, as investors continue to scale down exposure to equities following the mark down of share prices for 2021FY dividends amidst expectations of uptick in FI yields.
During the week, the overnight (OVN) rate expanded by 450bps, w/w, to 10.7 percent as the OVN remained depressed as system liquidity remained healthy against the backdrop of the FAAC disbursement (c. N350.00 billion) from the prior week and inflows this week from FX retail refunds, OMO maturities (N10.00 billion) and FGN bond coupon payments (N40.77 billion). However, the rate expanded at the end of the week following debits for CRR and the weekly OMO (N50.00 billion) and FX auctions.
In the absence of any significant inflows expected to hit the financial system next week, we expect system liquidity to be pressured. Thus, we envisage an expansion in the OVN rate from current levels.
Proceedings in the Treasury bills secondary market closed the week on a bearish note following a dearth in demand and as the secondary market rates adjusted to the increased NTB PMA rates.
Thus, the average yield across all instruments inched higher by 3bps to 3.3 percent. Across the market segments, the average yield expanded by 15bps and 2bps to 3.8 percent and 3.2 percent at the OMO and NTB segments, respectively.
At last week’s OMO auction, the CBN sold N50.00 billion worth of bills to market participants and maintained stop rates across the three tenors, as with previous auctions.
At the NTB auction, the CBN offered N143.29 billion – N2.49 billion of the 91-day, N2.09 billion of the 182-day, and N138.71 billion of the 364-day – in bills. Ultimately, the CBN allotted N174.19 billion – N13.88 billion of the 91-day, N20.35 billion of the 182-day and N139.96 billion of the 364-day bills – at respective stop rates of 1.75 percent (previously 1.74%), 3.00 percent (unchanged), and 4.45 percent (previously 4.00%).
Elsewhere, the Treasury bonds secondary market traded with mixed sentiments, albeit with a bullish tilt, as market reaction to the higher NTB stop rates midweek dampened the buying interests witnessed in the early part of the week. Consequently, the average yield declined slightly by 1bp to 10.7 percent. Across the benchmark curve, average yield expanded at the short (+1bp) end as investors took profits off the APR-2023 (+60bps) bond, but contracted at the long (-4bps) following demand for the MAR-2036 (-19bps) bond. Meanwhile the average yield was flat at the mid segment.
Nigeria’s FX reserve recorded its first accretion in four weeks as it increased by USD21.11 million w/w to USD39.55 billion (29th March 2022). Meanwhile, the naira depreciated by 0.1 percent to N416.63/USD at the I&E window (IEW), but was flat at N588.00/USD at the parallel market. At the IEW, total turnover (as of 31st March 2022) increased by 21.9 percent WTD to USD752.97 million, with trades consummated within the N410.00 – N453.25/USD band. In the Forwards market, the naira was flat at the 1-month (NGN418.13USD), 3-months (N424.08/USD) and 6-months (N433.42/USD) contracts, but appreciated at the 1year (+1.1% to N448.18/USD) contract.
