Local Bourse Advances During The Week, As Nigeria’s Foreign Reserve Surpasses $40bn For The First Time In Almost Two-Years



Corporate Earnings Continue To Dictate Global Market Sentiment

Last week, bullish sentiments dominated nine (9) out of the fourteen global market indices under our coverage, while five (5)Global Market 23102021 indices depreciated. This performance was a result of investors keeping themselves abreast of the quarterly corporate earnings result, news of coupon payment from the Chinese Evergrande Group, surging energy prices, inflation, important economic indicators, and rising expectations that the Federal Reserve will announce a tapering of stimulus next month.

According to the U.S Labour Department, the number of Americans filing new claims for unemployment benefits dropped by 6,000 to a seasonal adjustment of 290,000 for the week ended October 16. This was the lowest level since mid-March 2020, and the second week it has fallen below 300,000, pointing to a tightening labour market, though a shortage of workers could keep the pace of hiring moderated in October.

Also, The Federal Reserve imposed new restrictions on investments by its senior officials. The new rule prohibits senior officials from trading individual stocks, bonds, derivatives, and government-backed securities except for broad-based investments such as mutual funds but must be held for at least one year.

China’s economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages, supply-chain bottlenecks, and major wobbles in the property market. Data released on Monday from the National Bureau of Statistics (NBS) showed the Gross Domestic Profit (GDP) grew 4.9% in the third quarter from a year earlier after rising 7.9% in the second quarter. Also, China’s Retail Sales grew 4.4% in September from a year ago, up from a 2.5% gain in August, exceeding analysts’ expectations, while the Urban Unemployment rate stood at 4.9% in September.

In Europe, according to the National Bureau of Statistics (NBS), U.K Retail Sales unexpectedly dropped for the fifth month in a row, marking the longest period of consecutive monthly decline since the records began in 1996. Retail Sales fell by 0.2% in September from August, dropping 1.3% on the year, majorly driven by the decline in household goods stores (furniture and lightening) by 9.3% in September.

According to a survey by IHS Markit, growth in the euro-zone business activities has slowed down this month as firms face soaring costs due to supply constraints. IHS Markit’s Flash Composite Purchasing Manager Index (PMI), a good gauge for overall economic health, fell to a six-month low of 54.3 in October from 56.2 in September. Also, the service industry PMI and factory PMI both decline to 54.7 and 58.5 in October, against 56.4 and 58.6 respectively in September.

Consequently, all the major U.S indices under our coverage, DJIA Index, Nasdaq Composite Index, and S&P 500 Index increased by 1.08%w/w, 1.24%w/w, and 1.64%w/w respectively.

However, major indices under our coverage in Europe; the UK FTSE 100, and the German DAX Index depreciated by 0.41%w/w,  0.28%w/w respectively while France CAC 40 increased by 0.09%w/w.

Similarly, the major indices under our coverage in Asia, the Hong kong HANG SENG, China Shanghai Composite increased by 3.14%w/w, and 0.29%w/w, respectively while India S&P BSE Index, and Japan Nikkie 225 declined by 0.79%w/w, and 0.91%w/w on the news that the Chineses Evergrande Group is ready to pay off coupon payment on a dollar-denominated bond.

Furthermore, the major indices in the emerging markets under our coverage, South Africa FTSE/JSE, EGX 30, and Argentina Merval Index increased by 0.03%w/w, 1.24%w/w, and 5.99%w/w, except Brazil Bovespa Index decreased by 7.28% w/w.


In the coming week, we expect mixed sentiment, as investors react to the recently released economic data and outcome of the important monetary policy meeting. We anticipate investors to track quarterly earnings from the mega-cap stocks which could influence their sentiment.



Equity Sustains Positive Sentiment, as Market Capitalisation Expands by 0.78%w/wgainers 23102021 1

Transactions on the Nigerian bourse ended w/w on a positive note to extend the bullish performance to the sixth consecutive week. Positive market performances were recorded in three of the four trading sessions (due to the Eid-el- Maulud holiday). This performance was driven by sustained investors’ buy appetite in large capitalized stocks. As a result, the NGX-ASI and Market capitalization appreciated by 0.78% from 41,438.15 points and.N21.62 trillion to close at 41,763.26 points and.N21.794 trillion respectively Consequently, the year to date (YTD) increased to 3.71%, and investors gained N174 billion w/w.

At the end of the week, Industrial Goods Index emerged as the highest gainer with (+2.59%),  followed by the Oil & Gas Index (+1.40%), Banking Index  (+0.69%), while negative performances were recorded in Insurance Index (-1.31%), and  Consumer Goods (-1.05%).

NGXGROUP emerged as the best performing stock for the week with a w/w gain of +23.94%, while ROYALEX emerged as the worst-performing stock with a w/w loss of -17.19%.

A total of 1.565 billion shares worth N18.384 billion in 21,621 deals were traded this week by investors, as against a total ofLoser 23102021 1 2.84 billion shares worth N31.65 billion in 23,355 deals

Thirty-four (34) equities appreciated in price during the week, lower than Forty-five (45) equities in the previous week. Thirty-six (36) equities depreciated in price, lower than Fifteen (15) equities in the previous week, while eighty-six (86) equities remained unchanged, as against ninety-five (95) equities recorded in the previous week.


This week, we expect mixed sentiment, as investors continue to take positions in different stocks as the market anticipates the release of the 9M earnings report. Furthermore, investors will also track yield movement in the fixed income market.


NASD Market Extends Bullish Sentiment To Three Consecutive Weeks, As NSI Advanced By 0.1%


Transactions on the NASD OTC Security Exchange Market closed on a positive note to extend the positive sentiment to three consecutive weeks, as the NASD Security Index NSI advanced by 0.1%, representing 0.73 basis points to close at 747.53 points against 746.80 points in the previous week. Investors gained N600 million for the week, as the NASD OTC Market Capitalisation closed at N617.59 billion for the week.

Total trading activity for the week was valued at N39 million in  43 deals, against N584.46 billion in  40 deals recorded in the previous week. The most traded stocks on the exchange for the week are; SDCSCSPLC, SDFCWAMCO, SDNDEP, SDNASDPLC, SDVFDGROUP, and SDNIPCOPLC.

SDNASDPLC emerged top gainer for the week, with a maximum price appreciation of (+14.17% to N13.7)while SDFCWAMCO emerged as the top loser for the week with a price depreciation of (-6.25% to N120).

This week’s price appreciation resulted from investors’ buy-sentiment in medium and large capitalized stocks among which are; SDNASDPLC (+14.17% to N13.7), SDCSCSPLC (+8.13% to N17.95), and SDNDEP (+2.04% to N250).

NSI ReResultantly, the market breadth closed positively, recording 3 gainers and 1 loser.


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

Treasury Bills

Bearish Performance On The Secondary TBs Market


Trading activities on Treasury Bills this week were limited to the secondary market as no new instruments were offered and traded on a quiet note due to the activities on the primary bond market. Activities were seen from the short to long tenor bills.

The short and mid tenor bills closed majorly with sell-sentiment, particularly on the 27-Jan-22, 10-Feb-22, 24-Feb-22, 10-Mar-22, 17-Mar-22, 31-Mar-22while the longest tenor bills closed with a buy-sentiment 28-July-22, 11-Aug-22, 25-Aug-22, 8-Sep-22.

Consequently, system liquidity indicators closed lower, as Overnight (O/N) and Open Buy Back (OBB) advanced to 19.25% and 19.00% respectively, from 20.00% and 19.50% in the previous week.


Furthermore, the average yield of the Treasury Bills closed on a bearish sentiment to 5.38%, as against 5.20% recorded last week, representing an 18bps increase.

The OMO Bills market traded on a calm note as interest was observed majorly on the mid to long tenor bills, particularly on the 18-Jan-22, 25-Jan-22, 1-Feb-22, 8-Feb-22, and 15-Feb-22 bills.

However, the average yield on the secondary Open Market Operation (OMO) closed marginally bullish to 6.44% from 6.47%, representing a 3bps decrease


In the coming week, we expect the apex bank (CBN) to roll over the matured Treasury Bill instruments by offering new bills. Looking at the trend from the previous NTB auctions, we expect the investors’ appetite to be titled towards the longer end of the curve and the spot rate. We also anticipate large activities and bullish sentiment on the secondary money market, as a result of spill-over demand from the Treasury Bills primary auction and capital inflow from the maturing OMO (26-Oct-21) and TB bill (28-Oct-21).

Bond Market

bondaucFGN Sovereign Bond Auction: Marginal Rate On The 2050 paper closed higher By 20bps To 13.20%

This week, the Debt Management Office (DMO) on behalf of the Federal Government of Nigeria (FGN) held an FGN Bond auction by offering N150bn across 2026, 2037, and 2050 maturities.

At the FGN Bond Auction, the DMO offers of N50bn(2026), N50bn(2037), and N50bn(2050), was met with a subscription of N49.05bn, N80.92bn, and N120.74bn respectively, out of which the DMO allotted N44.80bn(2026), N52.72bn(2037), and N95.24bn(2050) bringing the total amount allotted to N192.76bn. As expected, investors’ appetite was titled towards the longer end of the curve, as the 2050-maturity was oversubscribed by 2.41x, while the 2026 and 2037 paper posted a subscription rate of 0.98x and 1.62x respectively.BN

Stop rates for the 2026 and 2037 papers were allocated at 11.65% and 12.95% respectively. However, the rate on the 2050 paper was allocated at 13.20% from 13.00%, representing a 20bps increase as against the stop rate at the previous bond auction.

Trading activities for the week on the secondary bond market closed relatively on a quiet note. Activities were seen majorly on the short to mid tenor bills.

Furthermore, the average yield on the bond traded on the FMDQ market closed on a bearish sentiment to 8.40%, as against 8.25% recorded last week, representing an increase of 15bps.


In the coming week, we expect the bond market to trade on a quiet due to activities on the Treasury Bills primary market. Also, we anticipate the secondary bond market to trade in line with the liquidity system.

Money Market

Weekly money market 22102021System liquidity indicators closed lower, as Overnight (O/N) and Open Buy Back (OBB) decreased to 19.25% and 19.00% from  20.00% and 19.50% respectively in the previous week.


Weekly foreign exchange 22102021Foreign Exchange Market

At the I&E FX window, the Naira remained unchanged to close on Friday (22/10/2021) at ₦415.07/USD last Friday’s position.

Weekly Foreign Reserve 21102021Foreign Reserve

The Foreign Reserve grew by $1,337.25million to the level of $40.96 billion (21/10/2021) from $39.62 billion (14/10/2021).


Crude oil 22102021Crude Oil

The Brent Crude and WTI Crude appreciated by $0.67/barrel (w/w) and $2.03/barrel (w/w) to $85.53/barrel and $83.76/barrel this Friday(22/10/2021) as against $84.86/barrel and $81.73/barrel last Friday(15/10/2021), representing an increase of 0.79% (w/w) and 2.48% (w/w). Similarly, Nigeria’s Bonny Light also increased by $0.03to $84.37/barrel on Friday(22/10/2021) from $84.34/barrel (15/10/2021), representing a rise of 0.04% (w/w)


Source: GTI Research

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