World markets are reeling under the pressure of bears, with the Nigeria equity market losing N158.3 billion in one week.
The two US leading equities market indices, the S&P 500 and NASDAQ, hedged lower by 1.0 per cent and 2.6 per cent week-on-week (w/w) respectively.
In Europe, the bears painted the markets red, as the report about Venezuela’s stoppage of oil shipments to the region – one of the two countries expected to provide Europe with energy supply in replacement to Russia – filters to the market.
Consequently, France’s CAC 40 and Germany’s XETRA DAX indices lost 0.6 per cent and 1.5 per cent S w/w sequentially. However, the UK FTSE All Share index shrugged off the worrisome 40-year high inflation data (which went up to 10.1 per cent in July from 9.1 per cent year-on-year (y/y) in June) published during the week to book a gain of 0.3 per cent w/w.
Back here in Nigeria, bears dominated performance on the local bourse for four of the five trading days – pulling the NGX All-Share Index down 0.6 per cent w/w to close at 49,370.62 points. Accordingly, Year-to-Date (YTD) return declined to 15.6 per cent (previously: 16.3 per cent) while market capitalisation shed N158.3 billion w/w to N26.6 trillion.
Activity level faltered as average volume and value traded fell 45.5 per cent and 9.7 per cent w/w respectively to 164.6 million units and N2.4 billion. The top traded stocks by volume were FBNH (127.3 million units), ETRANZACT (82.6 million units), and UBA (66.6million units) while NESTLE (₦2.8 billion), FBNH (N1.4 billion), and MTNN (N836.3 million) led by value.
Meanwhile, at the foreign exchange (forex) market, despite the late rally in crude oil price prompted by the IEA’s upward revision of its global oil demand forecast (99.7mbpd from 99.2mbpd), Brent futures dipped 1.6 per cent w/w to $96.6/bbl. due to the sharp decline recorded in the early trading days. Meanwhile, domestic external reserves raised 0.1 per cent w/w to $38.9 billion.
At the money market, system liquidity level was subdued for most of the week following the mop-up from Monday’s bond auction (worth N247.1 billion) which offset the impact of inflows of N100.0 billion from OMO maturities. Consequently, the liquidity level deteriorated at the end of the week (-N107.2 billion) compared to the prior week’s close (N82.7 billion).
Accordingly, OPR and OVN rates closed the week higher by 267 basis point (bps) and 200bps to 14.7 per cent and 15.0 per cent, respectively.
Earlier last week, the DMO sold instruments worth N247.1 billion against N225.0 billion on offer. Out of the 3 instruments, the JAN 2042 (Offer: N75.0 billion; Subscription: N183.3 billion; Sale: N167.5 billion) recorded the strongest interest with a bid-to-cover ratio of 2.4x.
Meanwhile, the APR 2032 instrument was undersubscribed (Offer: N75.0 billion; Subscription: N40.8 billion; Sale: N28.8 billion) with a bid-to-cover ratio of 0.5x. Likewise, the MAR 2025 instrument was undersubscribed (Offer: N75.0 billion; Subscription: N23.0 billion; Sale: N4.2 billion) with a bid-to-cover ratio of 0.3x.
Overall, stop rates rose across the MAR 2025, APR 2032, and JAN 2042 instruments with 1.5ppts, 0.5ppt, and 0.3ppt to 12.5 per cent, 13.5 per cent, and 14.0 per cent respectively from the prior auction.
