The value of listed equities on the floor of the Nigerian Exchange Group (NGX) depreciated by N37bn and 309 basis points while the All-share Index and Market Capitalization declined by 1.08% to close the week at 51,355.74 and N27.96 trillion from 52,944.13 and N28.92 trillion respectively. Year-to-Date closed at 0.20% last in the last trading sessions.
Profit-taking in large-cap stocks such as Zenith Bank (-12.20%), Champion Breweries (10.14), and UBA (-7.65%), among others, contributed largely to the slide last week.
Also, among last week’s losers, were AFRIPRUD and VITAFOAM which fell by 10.00% and 8.65% respectively, while TRANSCORP and IKEJA HOTEL were among the top gainers, with price appreciations of 44.97% and 19.83% respectively.
Market breadth (a measure of investor sentiment) strengthened in the just concluded week, increasing from 0.46x to 1.13x, as 35 stocks appreciated against 31 stocks that depreciated in share prices.
The activity level strengthened as the total traded shares volume and value increased by 39.01% and 42.52% respectively. A total turnover of 3.92bn shares worth N15.62bn in 16856.00 deals were traded last week against 2,82 billion shares worth N10.964 billion in 15686.00 deals that exchanged hands the previous week.
Trading in the top three equities namely Transnational Corporation Plc, Access Holdings Plc, and Fidelity Bank Plc (measured by volume) accounted for 3.302 billion shares worth N7.999 billion in 2,375 deals, contributing 84.23% and 51.21% to the total equity turnover volume and value respectively.
We expect moderation across indices, as speculation on rate veer towards the central bank pressing ahead with rate hikes or maintaining the current level.
Nigerian Fixed Income Market
Investors exhibited mixed sentiments last week in the Fixed Income Market, as three of the tenor yields under coverage increased. The yields on the 3, 5, and 10-year bonds advanced by 17bps, 23bps, and 2bps WoW respectively. On the flip side, the yield on the 1 and 30-year bonds declined by 92bps and 9bps WoW respectively.
In the secondary market, the Nigerian Treasury Bills Market closed the week bullish as the yields on the 91-day, 182-day, and 364-day paper, advanced by 1bp and 2bps, and 3bps, to close at 5.54, 8.25, and 12.91 respectively.
We expect the secondary market to advance further, as investors continue to seek for safe haven on the back of the anticipated rate hike.
Global and African Market
The global market experienced mixed sentiments last week as four out of the six indices under coverage declined WoW. While S&P 500, DAX 40, DOW JONES, and S’A JALSH closed in the red, FTSE 100 and NIKKEI appreciated by 0.48% and 0.25% respectively.
In the African Market, all four indices under our coverage depreciated WoW. The NGX ASI, S’A JALSH, KENYA NSE, and EGX 30 WoW went down by -3.09%, -1.23%, -3.33%, and -0.88% respectively.
Outlook for the week
Market activities would likely continue southward this week, ahead of US FED meeting and Q1 numbers next week.
Local Market Economic Updates
African Countries to Gain $4.2 Billion from open market treaty
The African Civil Aviation Commission (AFCAC) said the implementation of the Single African Air Transport Market (SAATM) will contribute $4.2 billion to the continent’s Gross Domestic Product (GDP), create 600 million jobs, and, grow air traffic by 51 percent in three years with additional 16 million air travelers. AFCAC further revealed that the implementation of SAATM in Nigeria will scale up the contribution of the aviation sector to GDP from the current 0.5 percent to one percent, and also increase air traffic by 54 percent.
FGN Savings Bonds Listed Savings Bond
NGX last week announced the commencement of April 2023 FGN Savings Bonds on the Nigerian Exchange Limited (NGX) on Thursday, 20 April 2023, at 10.032% FGS APR 2025, and 11.032% FGS APR 2026. The total units issued were 436,012 units and 643,204 units for 2025 and 2026 respectively.
Global and Emerging Market Economic Update
UK Inflation rate rose to 10% in March against Expectations
The United Kingdom on April 19th, released the inflation rate for the month of March, 2023. The consumer price index rose by an annual 10.1%, according to the Office for National Statistics, above a consensus projection of 9.8% in a Reuters poll of economists. This is a slight dip from the unexpected jump to 10.4% of February, which broke three consecutive months of declines since October’s 41-year high of 11.1%. On a monthly basis, CPI inflation was 0.8%, above a Reuters consensus of 0.5% and down from 1.1% in February.
US announced an Unemployment Rate of 3.5% in March
The unemployment rate in the United States edged down to 3.5 percent in March 2023, against expectations that it would hold at 3.6 percent. The number of unemployed people decreased by 97 thousand to 5.839 million and employment levels rose by 577 thousand to 160.892 million. The so-called U-6 unemployment rate, which also includes people who want to work, but have given up searching and those working part-time because they cannot find full-time employment, decreased to 6.7 percent in March from 6.8 percent. Meanwhile, the labor force participation rate edged up to 62.6 percent in March from 62.5 percent in February, the highest since March 2020. Egypt’s headline inflation up 33.9% in March.
Egypt RecordS 32.7% in inflation rate in March
Egyptian annual headline inflation rate surged to 32.7 percent in March 2023, up from 31.9 percent in February 2022, reported the Central Agency for Public Mobilization and Statistics (CAPMAS) last week.