Stocks Sustain Free Fall On Heightening Sell Offs As Naira Weakens
By CHUKWUMAH KELECHUKWU
The equities segment of the Nigerian Stock market sustained its free fall from previous sessions with market performance benchmark index declining by 0.15 percent to 29,818.80 points, following selloffs in large cap stocks.
Market capitalisation which measures value of traded stocks also declined by similar percentage to N13.119trillion.
In the same manner, the Naira weakened 0.01 percent against the US Dollar closing at N360.53 per dollar in the I&E FX window, but closed flat at N362 per US Dollar at the parallel market.
Remarkable 122.40 percent increase in total turnover at the I&E window to $100.05million on Wednesday, points to increased capital outflow from the economy, one of the traders told InsideBusiness on Wednesday.
He attributed it all to the state of the economy, stressing that investors are waiting for some positive catalyst that could inform an investment decision.
“Our outlook for equities in the short to medium term remains conservative, amidst absence of a positive catalyst. However, stable macroeconomic fundamentals remain supportive of recovery in the long term,” analysts at Lagos-based Cordros Capital stated in an email comments on the market situation.
The equities market has recorded 4.17 percent and 5.27 percent Month-to-Date and Year-to-Date percentage losses respectively.
On sectoral performance, losses were evident across all sector indices, save for the Banking (+1.34%) index, Industrial Goods (-0.83%), Oil & Gas (-0.65%), Consumer Goods (-0.41%), and Insurance (-0.30%) indices closed negative.
Notable stocks include ETI (+7.84%), WAPCO (-4.02%) SEPLAT (-3.19%), NESTLE (-1.41%) and MANSARD (-6.28%).
Market breadth was positive, with 21 gainers and 19 losers, led by FO (+10.00%) and PRESTIGE (-9.09%) respectively. Total volume of trades decreased by 57.64 percent to 2.91 billion units, valued at N67.89billion and exchanged in 3,441 deals.
At the money market, the overnight lending rate declined by 21 bps to 7.50 percent, amidst sustained buoyant liquidity.
Sentiments in the Treasury bills market were mixed, with a bearish tilt, as average yield inched up by 1 bp to 12.43 percent. Sell pressure was spread across the short (+4 bps) and mid (+3 bps) segments, with yields on the 64DTM (+34 bps) and 246DTM (+20 bps) bills expanding, respectively.
At today’s primary auction, the CBN fully allotted N17.61 billion – N3billion of the 91DTM, N4billion of the 182DTM, and N10.61billion of the 364DTM – worth of bills, at respective stop rates of 9.60 percent (previously 10.00%), 11.89 percent (previously 11.95%) and 12.02 percent (previously 12.34%).
Stop rates declined by an average of 26 bps amidst relatively strong demand (and a much smaller offering compared to the previous auction).
Proceedings in the bond market were also mixed, however with a bullish tilt, as yields compressed by 2 bps, on average, to 14.30 percent. Demand was evident across the short (-6 bps) segment, with yield on the JUL-2021 (-54 bps) bond contracting.
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