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NGX ASI Gained 1.19% WoW, Despite Closing Negative in Three of the Five Trading Sessions

The Nigerian bourse closed last week positive as the NGX ASI gained 1.19% WoW, despite closing
negative in three of the five trading sessions. Buy interest in large-cap stocks such as
MTNN (+2.60%) and GTCO (+10.80%) spurred bullish sentiments in the local Bourse.
Consequently, at 44,492.73 points, the equities market’s Year-to-Date return increased to
4.2% as market capitalization rose by N285 billion to close at N24.23 trillion.

Market breadth (a measure of investor sentiment) strengthened in the just concluded
week, rising from 0.75x to 0.94x as 31 stocks appreciated against 36 stocks that
depreciated. MANSARD and UBN rose by 15.69% and 13.04% to top the gainer’s chart
WoW, respectively, while SCOA and GUINNESS were the top losers, with declines of
26.29% and 18.96%, respectively WoW.

The activity level weakened as the total trade volume and value declined by 36.97% and
26.01%. A total turnover of 0.69 billion shares worth N8.67 billion in 15,418 deals were
traded during the week by investors on the floor of the Exchange. Trading in the top three
equities, namely Access Holdings Plc, Transnational Corporation Plc and Fidelity Bank Plc
(measured by volume), accounted for 232.923 million shares worth N1.237 billion in
1,316 deals, contributing 33.54% and 14.27% to the total equity turnover volume and
value respectively.

Outlook for the Week

We expect negative performance to return in the coming week as the equities market still remains unattractive for investors amid the prevailing rising yields environment.

The Nigerian Fixed Income Market

Last week, there was bullish sentiment in the bond market as three of the tenor yields under coverage closed lower.

At the Primary market, the DMO offers N225.0bn in its November bond auction, across the 2029s, 2032s, and 2037s. investors’ demand surpassed the total amount on offer, with a bid-to-cover ratio of 1.5x. Overall, interest was mostly in the longer end of the curve.

There was bullish sentiment in the Nigerian Treasury Bills Market as the 91, 182 and 364-day yields compressed by 1bp, 1bp and 5bps, WoW, respectively.

In the Money Market space, the Open Repo (OPR) and Overnight rates increased to 16.25% and 16.50% WoW.

Outlook for the week

We expect market activity in the fixed-income market to be influenced by the action of the CBN MPC meeting expected to hold this week

The Global and African Market

Investor’s sentiments were bearish in the global market as four all of the six indices under coverage closed lower with the exception of the FTSE 100 and DAX indices which gained 0.92% and 1.46%, WoW, respectively.

In the African Market, there was bullish sentiment as 3 of the four indices under coverage increased WoW. The EGX 30, NGX ASI and NSE, the gainers, rose by 4.37%, 1.19% and 0.73% WoW. Conversely, the only loser, S’A JALSH declined by 1.54%.

Outlook for the week

Market activity would likely be dictated by the hawkish stance of the FOMC in the near term.

AFEX Commodities market

The ACI remained unchanged while the AEI gained 3 97 closing the week at 210 37 points, up from 202 33 points, where it started the week The ACI and AEI remained in the positive territory at 5 89 and 10 72 respectively, y-t-d.

Domestic Economy

  • The annual inflation rate in Nigeria accelerated for the ninth straight month to 21.09% in October 2022 Nigeria’s Oil Production Exceeds 1mpd in October 2022
  • The Federal Government, through the National Bureau of Statistics, on Thursday said 130 million Nigerians are poor
  • Nigeria’s projected GDP growth for 2022 has been lowered by the International Monetary Fund (IMF) from 3.4% to 3% due to Nigeria’s weak oil production and the heavy impact of flooding.

Global Economy

  • Home sales in the United States declined for the ninth month in a row in October as surging mortgage rates and high prices pushed buyers out of the marketThe Uk Economy Contracted by 0.20% in the third quarter of 2022, signaling what could be the start of a recession.
  • Filings for U.S. unemployment insurance fell slightly last week and remained near historically low levels amid a still-tight labor market.China announced steps to ease its Covid policy by shortening quarantine requirements, simplifying travel rules, and adjusting its monitoring and control regime.
  • China’s economy sank into a deeper funk last month as the weight of strict zero-Covid measures, a real-estate downturn and sinking export demand underscored

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