The Nigerian stock market closed lower at the end of the week, with the All-Share index declining by 0.4% to close at 104,647.37 points. This dip was attributed to investors opting to lock in profits on bellwether stocks following recent gains in share prices. Notably, MTNN (-12.3%) recorded a significant loss, contributing to the market’s downturn. As a result, month-to-date (MTD) and year-to-date (YTD) returns moderated to +4.7% and +40.0%, respectively.
Across sectors, the Insurance (+8.9%), Banking (+4.2%), Industrial Goods (+0.6%), and Oil and Gas (+0.3%) indices posted gains, while the Consumer Goods (-0.4%) index declined.
Looking ahead, investors are expected to focus on the outcome of the Monetary Policy Committee (MPC) meeting scheduled for the following week to gain clarity on yield movements in the fixed income market. Consequently, cautious trading is anticipated, especially from domestic investors.
Money Market and Fixed Income
In the money market, the overnight (OVN) rate contracted by 379 basis points week-on-week (w/w) to 27.3%. This contraction was driven by inflows from FGN bond coupon payments and the liquidation of Deposit Money Banks’ (DMBs) special bills with the Central Bank of Nigeria (CBN). However, despite the moderation, the average system liquidity closed lower at a net long position of NGN760.53 billion.
In the treasury bills secondary market, bullish sentiments prevailed, leading to a contraction in average yields by 74 basis points to 17.9%. Demand was particularly strong in the mid and long segments of the curve as investors sought to sterilize excess cash. Looking ahead, sustained downward movement in yields is expected, driven by liquidity surfeit in the financial system and anticipated interest in bills.
Additionally, the CBN is scheduled to hold a Nigerian Treasury Bills Primary Market Auction (NTB PMA) on Wednesday, where it is expected to roll over NGN161.33 billion worth of maturities. This event is l
