Gain in Blue-Chip Stocks Propel Investor’s Wealth To Gain N660 Billion During The Week

163 Views

GLOBAL MARKET

Global Stocks See Red on Rising Bond Yield, Inflation Worries

This week, negative sentiments dominated twelve (12) out of the fourteen global market indices under our coverage, while the remaining two (2)global market 01102021 indices appreciated. This performance was due to rising bond yields following Federal Reserve’s move last week indicating that the fiscal stimulus could be tampered with as soon as November, deepening concern over persistent inflation caused by supply-chain constraints and investors’ keeping themselves abreast on the development of the Chinese property developer Evergrande’s Group financial woes has weighed on market sentiment.

The Fed Reserve chief on Wednesday (29-09-2021) during the European Central Bank (ECB) Forum said he was frustrated that getting people vaccinated and arresting the spread of the Covid Delta variant remains the most important monetary policy that they have. Also, he said bottlenecks and supply chain problems are not getting better, and that has been holding up inflation longer than they thought.

Also, the latest U.K quarterly GDP figures showed that the U.K economy grew by 5.5% in the second quarter, representing a sharp improvement from the 1.6% fall in the previous quarter.

Furthermore, French Consumer Spending rose 1% month-on-month, substantially above July’s drop of 2.4%, while the country’s annual inflation rate rose to 2.7% in September, slightly less than expected but still its highest rate in nearly a decade.

In Asia, China factory activities contracted for the first time since the Covid-19 began in 2020, with its Manufacturing Purchasing Manager Index (PMI) falling to 49.6% in September, from 50.1% in August.

Consequently, all the major U.S indices under our coverage, DJIA Index, Nasdaq Composite Index, and S&P 500 Index declined by 1.36%w/w, 3.20%w/w, and 2.21%w/w respectively.

Similarly, all the major indices under our coverage in Europe; the France CAC 40, UK FTSE 100, and the German DAX Index decreased by 1.82%w/w,  0.35%w/w, and 2.42%w/w respectively.

Also, all the major indices under our coverage in Asia, the Japan Nikkie 225, India S&P BSE Index and China Shanghai Composite declined by  4.89%w/w, 2.14%w/w, 1.24%w/w respectively except Hong kong HANG SENG  that grew by 1.59%w/w.

Furthermore, the major indices in the emerging markets under our coverage, South Africa FTSE/JSE, EGX 30, and Brazil Bovespa Index decreased by 0.61%w/w, 1.17%w/w, and 0.34%w/w respectively while Argentina Merval Index appreciated by 4.65%w/w, and 5.52% w/w.

Outlook

In the coming week, we expect investors to react to the recently released important economic data and outcome of the top central bank leaders forum, as market participants continue to show lingering uncertainty concerning rising inflation and the Covid Delta effect. 

EQUITY MARKET

NGX

Positive Sentiment Persist, As Investors Gain N660 Billion w/wGAINERS 30092021

Trading activities on the Nigerian equity market ended w/w on a bullish note to extend last week’s positive sentiment. Bullish market performances were recorded in two of the four trading sessions (due to the Indedepence holiday). This performance was driven by increased buy-interests in blue-chip stocks. as a result, the NGX-ASI and N20.30 trillion appreciated by 3.23% and 3.57% from 38,962.28 and N20.30 trillion to close at 40,221.17 points and.N20.96 trillion respectively Consequently, investors gained N660 billion last week.

At the end of the week, Industrial Goods Index emerged as the best performer with (+6.65%),  followed by Consumer Goods Index (+3.35%). Oil&Gas Index (+0.92%), and Banking Index (+0.60%) while only Consumer Goods Index (-7.58%) recorded negative performance.

UPL emerged as the best performing stock for the week with a w/w gain of +20.59%, while MANSARD  emerged as the worst-performing stock with a w/w loss of -29.82%.

A total of 2.19 billion shares worth N16.18 billion in 14,377 deals were traded this week by investors, as against a total ofLOSES 30092021 1.29 billion shares worth N13.92 billion in 16,745 deals.

Thirty-three (33) equities appreciated at price during the week, higher than Twenty-eight (28) equities in the previous week. Twenty-two (22) equities depreciated in price, lower than Twenty-three (23) equities in the previous week, while one hundred (100) equities remained unchanged, as against one hundred and four (104) equities recorded in the previous week.

Outlook

This week, we expect mixed sentiment, as investors take profit on the appreciated stocks, as well as hunt for lower-priced stocks with good fundamentals. Furthermore, investors will also track yield movement in the fixed income market.

NASD OTC

NASD Market Returns Bearish, as NSI Sheds 1.31%w/w

Priceotc

Transactions on the NASD OTC Security Exchange Market closed on a bearish note to reverse the previous week’s positive sentiment, as the NASD Security Index NSI receded by 1.31%, representing 9.64 basis points to close at 733.06 points against 742.70 points in the previous week. Investors lost N8.38 billion for the week, as the NASD OTC Market Capitalisation closed at N637.16 billion for the week.

Total trading activity for the week was valued at N12.25 billion in 100 deals, against N617.14 million in 186 deals recorded in the previous week. The most traded stocks on the exchange for the week are; SDNGXGROUP, SDCSCSPLC, SDFCWAMCO, SDNDEP, SDNASDPLC, SD11PLC, and SDFOODCPT.

SDFOODCPT emerged top gainer for the week, with a maximum price appreciation of (+21.33% to N0.91)while SDCSCSCPLC emerged as the top loser for the week with a price depreciation of (-8.28% to N16.5).

This week’s price depreciation resulted from investors’ sell-sentiment in medium and large capitalized stocks among which are; SDCSCSPLC (-8.28% to N16.5), SDWAMCO (-1.67% to N118), SDNGXGROUP (-1.42% to N13.17), and SDNASDPLC (-0.90% to N11.01).

SnaResultantly, the market breadth close negatively, recording 4 losers and 2 gainers.

Outlook

In the coming week, we expect mixed sentiment in the NASD OTC market, as investors cherry-pick volatile and attractive stocks.   

Treasury Bills

NTB Auction: Stop Rate on the 364-day T-bills rose by 30bps to 7.50% 

This week, the CBN held a Nigeria Treasury Bill (NTB) auction by offering N111.87bn across all tenors, to roll over matured bills. This could be driven by the need to mop up excess liquidity in the market.NTB29 1

At the Primary Market Auction (PMA), the CBN offered a total of N111.87bn across the 91-days, 182-days, and 364-days tenor, but the total bid settled at N115.41bn as bid-to-offer ratio on the three tenors settled at 2.42x, 0.91x, and 1.56x respectively.

Stop rates for the 91-days, 182-days, and 364-days remained the same at 2.50%, 3.50%, while the stop rate rose by 30bps to 7.50%.

Consequently, system liquidity indicators closed lower, as Overnight (O/N) and Open Buy Back (OBB) dropped to 15.75% and 15.00% respectively, from 17.25% and 16.00% in the previous week.OMOoper

BillNFurthermore, the average yield of the Treasury Bills closed on a bullish sentiment to 5.29%, as against 5.61% recorded last week, representing a 32bps increase.

Similarly, the average yield on the secondary Open Market Operation (OMO) closed to settle at 6.32%, representing an 11bps decrease.

Outlook

In the coming week, we expect bullish performance in the secondary market due to excess liquidity in the market. We also expect the system liquidity to close lower due to the FGN October Savings Bond auction.

Bond Market

Bonds289Bullish Performance on the Secondary Bond Market

This week’s activities on the Bond market were limited to the secondary market, as no new instrument was issued. Trading activities were on a quiet note, as investors cherry-pick attractive yields and position themselves for the FGN October Savings Bond Auction.

Consequently, the average yield on the bond traded on the FMDQ market closed on a bullish sentiment to 8.13%, as against 8.52% recorded last week, representing a decrease of 39bps.

Outlook

In the coming week, we expect the secondary bond market to trade on a relatively quiet note, as investors table in their bids for the October FGN Savings Bond offer (from Monday (04/10/2021) to Friday (08/10/2021).

Money Market

MONEY MARKET 300920211 1System liquidity indicators closed lower, as Overnight (O/N) and Open Buy Back (OBB) fell to 15.75% and 15.00% respectively, from 17.25% and 16.00%  in the previous week.

FMDQ 30092021 1Foreign Exchange Market

At the I&E FX window, the Naira appreciated by 1.52%(w/w) to close on Thursday (30/09/2021) at ₦413.38/USD (due to the independence holiday) against ₦414.90/USD from last Friday’s position.

FOREIGN RESERVE 30092021Foreign Reserve

The Foreign Reserve grew by $506.58 billion to the level of $36.60 million (29/09/2021) from $36.09 million (23/09/2021).

CRUDE OIL 01102021Crude Oil

The Brent Crude and WTI Crude appreciated by $1.19/barrel (w/w) and $1.90/barrel (w/w) to $79.28/barrel and $75.88/barrel this Friday(01/10/2021) as against $78.09/barrel and $73.98/barrel last Friday (24/09/2021), representing an increase of 1.52% (w/w) and 2.57% (w/w). Similarly, Nigeria’s Bonny Light also increased by $1.29 to $77.67/barrel on Friday(01/10/2021) from $76.38/barrel (24/09/2021), representing a rise of 1.69% (w/w)

 

Source: GTI Research

You may also like...