Stock Market

Despite observing losses in two (2) trading days this week, investors closed the week in a happy mood as the market gained 0.47% Week-on-Week (WoW), representing a market capitalization gain of NGN3.34trn. Consequently, the market’s Year-to-Date (YtD) return climbed to 31.16% (vs.30.54% YtD last Friday). This positive sentiment was driven by gains in TRANSCOHORT, OANDO and GTCO outweighing losses in OKOMUOIL, NESTLE, and STANBIC. Impressive performance in the Oil & Gas, Industrial, and Consumer sectors were driven by OANDO, WAPCO and DANGSUGAR, respectively. Conversely, losses in STANBIC and CUSTODIAN respectively dragged down the Banking and Insurance sectors. Looking ahead, we maintain our view of investors positioning themselves in fundamentally strong stocks ahead of the release of Q3:2024 earnings results and dividend payments, though elevated fixed income yields remain a notable damper to this.

Fixed Income

The Nigerian fixed income market concluded the trading week on a negative note, with yields rising. The Nigerian Treasury bills (NT-bills) witnessed a decline in the price of the instrument as the average yield surged by 100bps WoW to close at 24.16%. This was driven by selloffs across the tenors. Similarly, the FGN bond market closed negatively as the average yield rose by 20bps WoW to settle at 19.30%. This was on the back of selloffs across the instruments, specifically in the MAR-2025(+130bps), FEB-2031 (+58bps) and JUN-2038 (+156bps) instruments. Consequently, average yields in the overall Naira fixed income market increased by 60bps WoW to 21.73%. In the coming week, we expect this negative trajectory to persist due to tight liquidity in the market.

Strategy

Our investment strategy for this week includes buying tickers in the Oil and gas, Banking and Industrial Goods sectors.

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