BY BAMIDELE FAMOOFO
Investors in the equities market picked profit worth N236.6 billion in one week especially from industrial goods and banking stocks.
The domestic bourse maintained its bull transition driven by strong buying interest and price appreciation in the large – mid cap stocks and portfolio reshuffling by investors seeking gain ahead of the year-end seasonality.
Year-to-date gain uptrend further to 15.45 percent while the market cap returns printed 20.5 percent.
As a result, the benchmark index closed northward by 0.9 percent week on week to 49,316.29 points while the market capitalization appreciated by 0.9 percent week on week to N26.86 trillion as the bulls and bears fight for market dominance in the week.
Consequently, the positive sentiment and the persistent market volatility presented huge profit-taking activities to investors from some of the major sectors and as a result, the market saw gains from price appreciation in tickets such as LEARNAFRICA (+28%), CORNERST (+13%), PZ (+10%), ARDOVA (+10%) and ZENITHBANK (+9%) respectively.
Across the sectorial front, the performance was largely bullish in the week with 4 out of 5 sectors closing northward and was spearheaded by the Industrial Goods sector for another week, emerging as the leading advancer (+3.44%) for the week and followed by NGX Banking, Consumer, NGX Insurance and NGX Oil/Gas Index which closed positive by +2.87 percent, +0.47 percent and +0.36 percent in that order.
On the flip side, the NGX Consumer Goods sectors closed the week as the lone decliner by -0.2 percent week on week.
Meanwhile, the level of trading activities in the week varied as the total traded volume and value nosedived by 33.54 percent and 36.45 percent week on week to 814 million units valued at N9.69 billion.
However, the total deals traded for the week surged by 1.12 percent week on week to 15,488 trades for the week. Going into the new week, we expect the current bullish trend to persist as investors continue on profit booking and portfolio rebalancing ahead of the year-end seasonality amid election uncertainty. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals.
At the money market, the CBN allotted T-bills worth N13.58 billion to refinance N16.25 billion worth of matured Treasury bills. The 364-day bill, in particular, was issued at a lower rate due to the massive subscription level, given the auction’s high bid-to-cover ratio of 32.84x. Consequently, the stop rate for the 364day bill fell from 13.05 percent to 9.89 percent. Likewise, stop rates for the 91-day bill and 182-day bill were cut to 5.50% (from 6.50%) and 7.30% (from 8.00%), respectively.
In tandem with the downturn in primary market rates, secondary market yields declined for the majority of the maturities tracked.
NITTY maturities of 1 month, 3 months, and 6 months decreased to 5.56 percent (from 6.07%), 6.60 percent (from 7.10%), and 13.25 percent (from 12.54%), respectively.
NITTY for 12 months increased to 13.25 percent (from 12.54%). Meanwhile, due to the low value of maturing OMO bills worth N14.00 billion, NIBOR for one month, three months, and six months increased to 13.75 percent (from 13.20%), 14.94 percent (from 13.50%), and 16.56 percent (from 14.25%), respectively. On the other hand, NIBOR for overnight funds declined to 10.00% (down from 15.50%).
In the new week, Treasury bills worth N35 billion will mature via OMO; hence, we expect interbank rates to move in mixed directions amid a marginal inflow of matured OMO bill.
Also in the review week, the Debt Management Office sold N264.52 billion (N39.52 billion more than its offer).
The DMO allotted N264.52 billion worth of bonds (re-openings); viz., N45.448 billion for the 14.55 percent FGN APR 2029, N40.420 billion for the 12.50 percent FGN APR 2032, and N178.647 billion for the 16.25 percent FGN APR 2037.
Given the 2x subscription, especially for longer maturities, stop rates for the 29s, 32s, and 37s fell to 14.50 percent, 15.00 percent, and 16.0 percent, respectively, from 14.50 percent, 15.00 percent, and 16.00 percent. Despite the decline in stop rates, traders were bullish on most maturities tracked in the secondary market except for the 10-year, 16.29 percent FGN MAR 2027 debt, which stayed flat at 13.94 percent.
The 15-year 12.50 percent FGN MAR 2035 bond, the 20-year 16.25 percent FGN MAR 2037 bond and the 30-year 12.98 percent FGN MAR 2050 bond gained N2.27, N9.41, and N4.49, respectively; their corresponding yields fell to 14.00 percent (from 14.43%), 14.44 percent (from 16.00%), and 14.00 percent (from 14.72%), respectively.
The value of FGN Eurobonds traded in the international capital market depreciated for most maturities tracked as investors weighed the impact of the US Federal Reserve’s decision to hike benchmark rates by 50 bps. Hence, the 20-year, 7.69 percent paper FEB 23, 2038, and the 30-year, 7.62 percent NOV 28, 2047, lost USD 0.28 and USD 0.29, respectively, while their corresponding yields rose to 12.26 percent (from 12.20%), and 12.09% (from 12.04%), respectively. The 10-year, 6.38 percent JUL 12, 2023 bond gained $0.08, although its yield declined to 9.21 percent (from 9.25%).
