FG’s bonds rise, market loses N85bn as Buhari wins re-election

Trading on the equity segment of the Nigerian Stock Exchange (NSE) ended on another negative performance as investors’ wealth decreased by N85.6bn to close market capitalization at N12.0 trillion.

The result followed a similar loss of N84.4bn on Tuesday.

However, the Federal Government of Nigeria (FGN) dollar-denominated government bonds rose to 5-7 month highs, yesterday, after President Muhammadu Buhari won a second term at the helm of Africa’s largest economy and top oil producer.

The country’s longer-dated bonds were up as much as 0.8 cents in the dollar to extend a more than 10 cents rally since the start of the year.

The All Share Index (ASI) declined 71 bps to close at 32,244.24 points while Year To Date (YTD) gain reduced to 2.6%.

The decline followed a continued profit taking in ZENITH(-3.5%), UNILEVER (-4.7%) and OANDO (-9.7%).

However, activity level strengthened as volume and value traded increased by 41.6% and 10.1% to 456.1m units and N2.7bn respectively.

The top traded stocks by volume were DIAMOND (187.4m units), FIDELITY (45.1m units) and ACCESS (33.1m units) while DIAMOND (N466.7m), ZENITH (N245.8m) and GUARANTY (N242.7m) led the top traded by value.

Performance across sectors was largely bearish as 4 of 5 sectors trended southwards.

The Oil & Gas index declined the most, down 1.7% on the back of losses in OANDO (-9.7%) and ETERNA (-7.4%).

In the same vein, the Banking, Consumer Goods and Industrial Goods indices declined 1.4%, 0.7% and 5bps respectively based on sustained profit taking in ZENITH (-3.5%), DIAMOND (-2.0%), NESTLE (-1.0%), UNILEVER(-4.7%) and WAPCO (-0.7%). On the flipside, gains in CORNERSTONE (+4.6%) buoyed the Insurance index (+0.1%).

Investor sentiment as measured by the market breadth worsened to 0.3x from 3.1x recorded yesterday, as 10 stocks advanced against 30 decliners.

NEIMETH (+9.8%), PZ (+9.3%) and NPFMCRFBK (+8.7%) were the top gainers yesterday, while UNIONDAC (-9.7%), OANDO (-9.7%) and WEMA (-8.2%) declined the most.

Analysts at Afrinvest said: “Following the conclusion of the 2019 presidential election, we advise investors to take position in fundamentally good stocks trading at cheap prices as we expect improved earnings to buoy performance in the near term.”