FeaturedMarket Update

Bears on Rampage as Nigerian Equities Market Gave up 189Bpts: 31/01/2019

Equities trading on the floor of The Nigerian Stock Exchange dipped further today, as the lead performance index-NSEASI gave up 189Bpts and rounded up at 30,557.20 from 31,145.34. All observed market indices in this report closed below their respective opening points. Thus, Week to Date the lead activities index is down by 277Bpts while the total lost points in the month of January is 278Bpts. See the index movement table for details.

Value loss by the market capitalization of the listed equities during today’s trading activities was N219.321 billion, same as 189Bpts below the opening value.  Meanwhile, trading activities for the day produced 10 ADVANCERS and 32 LAGERS. NSEASI Year to Date loss is now 278Bpts while the Market Capitalization Year to Date loss stood at N325.785 billion same as 278Bpts below the year’s opening value.

The bears finally took over the market today after testing for three consecutive days. The diversion sported on Money Flow Index (MFI) re-adjusted as both price and volume now agrees. In our opinion, the market is currently responding to high political tension, as the nation enters the election month tomorrow. Making the picture worse is the tight challenge that played out after the interview of the major opposition party’s presidential candidate, which shivers the ruling party. In other words, the sudden reappearance of the bear is as a result of traders’ positioning against unexpected events from the election. Since the earnings season is also at the corner, we are of the opinion that long term positions should be held.

As at the time we compiled this report, Brent Crude trades at $61.89/bbl having gained 0.24% above the last close price.

At the interbank rate today, the Naira closed unchanged at N306.75 against the USDollar.  See below table for BDC rates by four major locations within the country. Meanwhile, the I&E FX Window started from N363.00 traded as high as N365.50 before rounding up at N363.03, having transacted a total of $231.46 million through the day. Please note that, margin between the close and open value is an equivalent of 8Bpts loss. We are of the opinion that the FX-Market will trade within same range tomorrow.

In the money market, the Overnight (O/N) rate closed at 11.36%, same as 6.86% above the previous closing position. Meanwhile, Open Buy-Back (OBB) rate ended at 10.29%, that is, 6.45% above the previous close. We are of the opinion that the money market will maintain this range on the next business day. Safe Trade.

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