The domestic equities market closed the week in negative territory, extending a bearish run driven by tepid investor confidence and the MPC’s unexpected decision to hold the MPR at 27.00%. The All-Share Index (ASI) dipped by 0.1% w/w to 143,520.53 points, pressured by selloffs in BUACEMENT (-4.8%), NB (-2.6%), UBA (-1.2%), and OANDO (-2.9%). As a result, month-to-date returns fell to –6.9%, marking the first monthly contraction since March 2025, while year-to-date gains moderated to +39.4%. Trading activity, however, strengthened as market volume and value rose by 55.2% and 9.1% w/w, respectively.
Sectoral performance was broadly bearish, with declines across the Industrial Goods (-1.9%), Oil & Gas (-0.8%), Consumer Goods (-0.7%), and Insurance (-0.1%) indices. The Banking Index (+0.7%) emerged as the lone gainer, buoyed by bargain hunting in select banking stocks. Market watchers believe sentiment could improve in December, supported by bargain opportunities in oversold large-cap counters, institutional portfolio adjustments, and early positioning ahead of full-year earnings, although potential CGT-related selloffs remain a risk.
In the money market, the OVN rate moderated by 213bps to 22.7%, reflecting net inflows from OMO maturities that outweighed debits from the FGN bond PMA. Liquidity conditions remain strong, with system liquidity averaging ₦1.93 trillion. Financial experts expect buoyant liquidity to drive a marginal decline in short-term rates, aligning with the CBN’s easing bias.
Treasury bills traded mixed, with bearish tones overall as average yields rose by 12bps to 19.2%. NTB yields eased by 11bps to 16.8%, while OMO yields jumped 46bps to 21.9%. With system liquidity still robust, financial experts anticipate strong NTB demand and softer yields at the upcoming NTB auction, where ₦700 billion worth of maturing bills will be offered.
The FGN bond market was largely quiet for most of the week but turned bearish toward the close, leading to a 14bps rise in average yields to 15.6%. Short-, mid-, and long-dated instruments all recorded yield increases. Financial experts expect a slow but modest decline in yields in the near term, supported by the current liquidity surplus and the MPC’s cautious easing direction.
In the FX market, the naira appreciated by 0.7% w/w to ₦1,447.95/$ on the back of strong FX supply from the CBN and sustained offshore inflows. Gross reserves climbed for the nineteenth consecutive week to $44.56 billion. Forward rates strengthened across all tenors, reflecting improving market confidence. Market watchers expect continued naira stability, backed by strong FX liquidity, healthy reserves, and supportive global monetary conditions.
