Nigerian Market Round-Up: Profit-taking continues as the local bourse sheds 219bps

NSE ASI further sheds 219bps: The equities market recorded more losses today as investors continued to book gains from last week's rally. The All Share Index lost 766.5 points to close at 34,175.2 points, compared to yesterday's 34,941.8 points even as the market capitalization also shed N260.4bn to close at N11.6trn (US$58.3bn).  Sell pressure in counters like OANDO (-9.7%), NB (-5.7%), WAPCO (-5.0%), SEPLAT (-5.0%), DANGCEM (-1.1%) and other large-cap banking stocks contributed to the loss in the market today. In the same vein, market activity level was low as only 10 stocks gained against declines in 44 stocks to peg the market breadth at 0.2x. The Relative Strength Index (RSI) shows that the market is still in the "Overbought" region. Hence, we expect to see more profit-taking in the market in the next trading session.

Losses across all sectors:  The bearish trend cut across all sectors with the Services sector posting the largest loss as it returned -3.8% on the back of declines in TRANSCORP (-4.9%) driven partly by the company's weak earnings release. Depreciation in OANDO (-9.7%) and SEPLAT (-5.0%) also weakened the Oil and Gas sector as it posted -3.5% daily return. |The Financial Services sector was also depressed by losses in the banking counters such as GUARANTY (-5.7%), ZENITHBANK (-5.0%), UBA (-1.1%), FBNH (-0.3%) as the sector returned -3.0%. Declines in highly capitalised NB (-5.0%), WAPCO (-5.0%) and DANGCEM (-1.1%) weighed down the Consumer and Industrial Goods sectors as they returned -2.0% and -1.4% respectively.

Headline	Today	Previous Session	Change
NSE All Share Index (points)	34,175.2	34,941.8	-2.2%
Market Capitalization  (N'bn)	11,607.6	11,868.0	-2.2%
Market Capitalization  ($'mn)	58,285.9	59,587.2	-2.2%
Total Value Traded (N'mn)	4,662.5	8,313.2	-43.9%
Total Value Traded ($'mn)	23.4	41.7	-43.9%
Total Volume Traded (Mn Units)	704.1	581.8	21.0%

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Low demand for bonds

Investors remained bearish on bond instruments today as yields for all notes increased. Thus the average yield increased by 37bps to 14.7%. The Treasury Bills market also traded down as the average yield added 9bps to close at 14.0%. Yield for the 12M instrument increased by 1bp while yields for the 3M and 6M instruments decreased by 11bp and 26bps respectively.  

The USD/NGN remained relatively flattish with a marginal gain of 1bp to close at N199.15/US$ at the interbank market today.

Nigerian Market Round-Up: Bullish run fizzle out as ASI sheds 220bps

Profit-taking pulls back the ASI: The bullish run in the equities market fizzled out today as the market recorded loss after ten consecutive trading days of gains, due to profit-taking by investors. The benchmark index shed 220bps to close at 34,941.8 points even as the market capitalization lost N267.1bn to settle at n11.9trn (US$59.6bn).  Today's loss was largely driven by profit-booking in the tier1 banking stocks - GUARANTY (-9.7%), ZENITHBANK (-5.0%), UBA (-4.9%); and other highly capitalised counters like SEPLAT (-9.8%), GUINNESS (-4.1%), NB (-3.8%), DANGCEM (-1.1%). Market activity also slowed down as the market breadth closed at 0.5x on the back of gains in 20 stocks against declines in 42 stocks.  While we expect to see some more profit-booking in the early part of the week, we  remain optimistic on the overall direction of the market this week as  positive sentiments  continue to drive investors' appetite. We believe there is still further upside from a valuation point of view; hence we expect the market to close positive this week.

Most sectors decline:  In line with the mood in the market today, most of the sectors posted negative daily returns today. The Financial Services sector closed with -4.5% daily return as the banking stocks such as GUARANTY (-9.7%), ZENITHBANK (-5.0%), UBA (-4.9%) and ACCESS (-2.3%), declined due to profit taking activities. Depreciation in SEPLAT (-9.8%) and FO (-3.5%) also depressed the Oil and Gas sector to return -4.4%. Consumer Goods sector returned -1.5% as PZ (-4.7%), GUINNESS (-4.1%) and NB (-3.8%) declined. In the same vein, loss in heavyweight DANGCEM weighed down the Industrial Goods sector to post -0.9% return. 

Headline	Today	Previous Session	Change
NSE All Share Index (points)	34,941.8	35,728.1	-2.2%
Market Capitalization  (N'bn)	11,868.0	12,135.1	-2.2%
Market Capitalization  ($'mn)	59,587.2	60,934.3	-2.2%
Total Value Traded (N'mn)	8,313.2	18,753.8	-55.7%
Total Value Traded ($'mn)	41.7	94.2	-55.7%
Total Volume Traded (Mn Units)	581.8	1,174.4	-50.5%

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Sell-offs in the fixed income space

both the Bond  and Treasury Bills markets traded bearish today as sell-offs hit the market. Average yield in the increased by 17bps to 14.3% as yields for most of the instruments increased. Yield for JAN-2022 however declined by 7bps while JUL-2030 traded flat. The Treasury Bills market was also bearish as the average yield added 37bps to close at 13.9%. Yields for the 3M, 9M and 12M instruments increased by 30bps, 13bp and 11bps respectively.  

The USD/NGN declined marginally by 1bp to close at N199.17/US$, at the interbank market today.