Nigeria equities market flirts with three-day low as global markets stumbles again

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THUR, FEBRUARY 8 2018-theG&BJournal-Nigerian stocks took a battering Wednesday, the third in row while investors remained bearish in the Treasury Bills market (NTB) as well as the Bond market as anticipation builds ahead of Q4 corporate releases.

By the end of Wednesday trading the All-share Index (ASI) was down by 0.77% at 43,538.16 points, putting it on course as one of the biggest one-day loss since the beginning of the year.

The Industrial Goods (-1.06%), Oil & Gas (-0.81%), Insurance (-0.79%), and Consumer Goods (-0.31%) indices closed in negative territory, following profit taking in the shares of DANGCEM (-2.22%), MOBIL (-5.00%), AIICO (-4.55%), and NB (-2.00%) respectively. Conversely, the Banking (+0.59%) index turned positive, owing to demand for ZENITHBANK (+2.56%) shares.

Market breadth remained negative with 39 losers and 18 gainers, led by UNIC (-9.52%) and CAVERTON (+9.71%) shares. Total volume traded dropped by 29.12% to 508.30 million units, valued at NGN4.57 billion, and exchanged in 6,155 deals.

The USD/NGN remained flat at NGN363 in the parallel market, while it strengthened by 0.03% to NGN360.21 in the I&E FX window. Total volume traded in the I&E FX window increased by 26.94% to USD212.31 million, exchanged within the range of NGN325 to NGN361.50.

The overnight lending rate continued to record significant expansion, increasing by 1,567 bps to 53.08%, despite relative improvement in liquidity position to NGN10.78 billion deficit, from NGN93.29 billion deficit yesterday. Meanwhile, no sale was recorded at today’s OMO auction.

Accordingly, investors remained downbeat in the NTB market, with average yield inching higher by 11 bps to 14.17%. Yields expanded across all ends of the curve – short (+26 bps), mid (+5 bps), and long (+3 bps) – driven by selloffs of the 57DTM (+155 bps), 99DTM (+28 bps), and 239DTM (+31 bps) bills respectively.

Proceedings also remained bearish in the bond market, as average yield rose by 10 bps to 13.77%. Yield expansion at the mid (+24 bps) and long (+7 bp) ends of the curve, outweighed contraction at the short (less than 1 bp) segment. The notable bonds include the FEB-2020 (+39 bps), JUL-2034 (+17 bps), and JUN-2019 (less than 1 bp) respectively.

Meanwhile, across the globe, Asian stocks reeled as investors assessed the implications of the recent US (DOW) market volatile swing that elevated volatility. In the US, one day after the DOW traded both up 500 and down 500points in the same trading session; equities again fluctuated through the session on high volume before ending lower after heavy selling in the final 15 minutes trading Wednesday.

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