Nigerian Equities Market Update: Market Maintained Bearish Path, on the Wings of Weak Economic Fundamentals

Diving further south, equities trading on the floor of The Nigerian Stock Exchange ended in the red, as the lead performance pointer NSEASI gave up 23Bpts of its trading points and closed at 30,029.15 from 30,099.83. It was a mixed performance amongst the observed market indices as shown in the index movement table. Thus, Week to Date, market is 132Bpts below opening while the total lost points in the current month stand at 335Bpts. See the index movement table for details.

Value loss by the market capitalization of the listed equities during today’s trading activities was N31.127 billion, same as 23Bpts below the opening value.  Meanwhile, trading activities for the day produced 14 ADVANCERS and 15 LAGERS. NSEASI Year to Date loss is now 446Bpts while the Market Capitalization Year to Date gain stood at N1.504 trillion same as 1,283Bpts above the year’s opening value.

In the absence of corporate score cards, the market continue its reliance on economic trend. Judging by the consistent bearish moves posted by the market in recent times, one could safely conclude the weakness of economic factors in encouraging investments. For example, the government is not only sluggish in appointing its officers, but is seen to be more political in its approach. Making the picture more unfavorable is the complete breakdown of security in the country. Please understand that this had reduced productivity as seen in the nations GDP growth. Debt servicing of over 50% of GDP is another worrying part of the system.

Nevertheless, we are of the opinion that, most listed equities are currently attractive especially for long term purpose. In other words, taking advantage of low priced equities is an intelligent investment decision at the moment. Stock selection by half year incentives is also recommended.

At the interbank rate today, the Naira closed unchanged at N306.95 against the dollar. See below table for BDC rates by four major locations within the country. Meanwhile, the I&E FX Window started from N360.23 traded as high as N361.50 before rounding up at N360.67, having transacted a total of $142.13 million through the day. Please note that, margin between the close and open value is an equivalent of 1Bpts gain. 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 5.71%, same as 3.79% above the previous closing position. Meanwhile, Open Buy-Back (OBB) rate ended at 5.43%, that is, 3.29% 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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