Elevated Treasury bill yields are expected to remain a key headwind for the Nigerian equities market this week as investors continue to shift funds toward risk-free assets.
Capital market analysts said the attractive risk-adjusted returns on T-bills are diverting flows from stocks, keeping sentiment weak on the Nigerian Exchange (NGX).
Cordros Securities Limited noted that, “This week, we expect elevated Treasury bill yields to remain a key headwind for the equities market, as attractive risk-adjusted returns continue to divert investor flows from risk assets.”
Cowry Assets Management Limited stated that, “Looking ahead, the Nigerian equities market is expected to remain cautious in the near term as profit-taking activities and weak investor sentiment continue to weigh on performance. However, selective bargain hunting in fundamentally sound stocks may provide support, while investors monitor key macroeconomic indicators and corporate earnings for market direction.”
Meanwhile, profit-taking dominated the domestic stock market last week, with the All-Share Index closing lower in all five trading sessions as investors locked in gains across select large-cap names.
The benchmark NGX All-Share Index (ASI) fell by 3.59 per cent week-on-week to close at 235,941.27 points, while market capitalization declined by N5.64 trillion to N151.327 trillion. Consequently, the market’s year-to-date return moderated to 51.62 per cent, reflecting weakening investor confidence in the domestic equities market.
Market breadth remained significantly negative, with only 16 gainers against 78 losers. Cornerstone Insurance led the gainers table by 11.01 per cent to close at N6.05 per share. Academy Press followed with a gain of 8.72 per cent to close at N8.10, while Conoil went up by 8.25 per cent to close at N210.00 per share.
On the other side, International Energy Insurance led the decliners table by 28.83 per cent to close at N5.06 per share. First Holdco followed with a loss of 20.29 per cent to close at N55.00, while John Holt declined by 17.65 per cent to close at N11.20 per share.
Meanwhile, a total turnover of 3.075 billion shares worth N254.614 billion in 287,157 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 4.964 billion shares valued at N207.521 billion that exchanged hands the previous week in 235,966 deals.
The Financial Services Industry led the activity chart, with 2.074 billion shares valued at N64.490 billion traded in 121,981 deals, contributing 67.44 per cent and 25.33 per cent to the total equity turnover volume and value, respectively.
The Services Industry followed with 175.743 million shares worth N2.759 billion in 19,590 deals, while the Consumer Goods Industry traded a turnover of 133.375 million shares worth N12.680 billion in 30,730 deals.
Trading in the top equities—Access Holdings, Sterling Financial Holdings Company, and Jaiz Bank—accounted for 819.234 million shares worth N12.247 billion in 21,809 deals, contributing 26.64 per cent and 4.81 per cent to the total equity turnover volume and value, respectively.
