Nigerian Equities Sink On Re-opening Of Monthly Bond Issuance
Nigerian equities depreciated by a whopping N652.83 billion on Monday on re-opening of the country’s monthly bond issuance where government is looking to raise N225 billion at elevated interest rates.
With eyes on fixed income, investors massively offloaded stakes in bluechip shares of AirTel Africa Plc which fell by maximum -10 percent, eroding NGX All Share Index by 2.52 percent to 46,368.65 points, the lowest point since 28 January.
In the same vein, the market capitalisation which measures value of traded equities depreciated to N25.25 trillion, leaving the year-to-date return down to 8.55 percent.
Market operators attributed the sharp decline on migration of investors to fixed income market.
“It is a direct outcome assets reshuffling. The Debt Management Office (DMO) re-opened its monthly bond issuance today, offering improved interest rates across board. It is not surprising to see investors migrating to fixed income,” says Tajudeen Olayinka of Valmond Securities Limited.
Analysts said the adjusted rate of the 10 year tenor may have attracted investors to the auction held today, and another round expected to hold on Wednesday.
Nevertheless, analysis of equities market activities showed that trade turnover settled higher relative to the previous session, with the value of transactions up by 1.04 percent indicating that low price hunters are also picking up the shares.
A total of 137.98 million units of shares valued at ₦4.32 billion were exchanged in 3,234 deals. GTCO traded with +1.12 percentage gain led the volume chart with 33.72 million units traded while AirTel with a sharp drop by -10 percent led the value chart in deals worth ₦1.74billion.
PZ with a price gain of +9.52 percent led thirteen 13 others on the gainer’s table, while AirTel (-10 percent) topped four others on the losers table.
The DMO offered for subscription a total of N225 billion notes, with N75 billion each across the three tenors. The rate for the FGN APR 2029 maturity was adjusted to 14.55 percent compared to the 13.53 percent offered in September, while the rates for FGN APR 2032 and FGN APR 2037 stayed at 12.50 percent and 16.24 percent, respectively.
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