Stock Market

Despite losing three (3) times, investors went home smiling as they gained NGN49.53bn, bringing the market to close positive at 0.09% week-on-week (WoW). This is following gains in SEPLAT, FIDELITY and FBNH, which offset losses in OANDO, UBA and STANBIC. Consequently, the Nigerian stock market has gained 30.54% from the beginning of the year till today. We observed gains in the Oil and Gas, Banking and Insurance sectors, driven by gains in SEPLAT, FIDELITY and MANSARD, respectively. On the other hand, NB and WAPCO dragged the Consumer Goods and Industrial Goods sectors, respectively. In the coming week, we expect that investors will continue positioning themselves in stocks with strong fundamentals to take advantage of the returns that might arise from the release of the Q3:2024 earnings results and dividend payments. However, we acknowledge that rising yields in the fixed income market could be a downside to this outlook.

Fixed Income

Earlier this week, at the primary Nigerian Treasury bills (NT-bills) auction held, the CBN offered NGN81.90bn worth of treasury bills. Demand at the auction was primarily skewed to the 364-day bill. Furthermore, the CBN conducted an Open Market Operation (OMO) auction, offering NGN300bn worth of bills.
Meanwhile at the secondary market, the Nigerian fixed income market concluded the trading week on a negative note, with yields rising (leading to a decline in prices of bonds and T-bills) across the board. The NT-bills market closed with the average yields up by 0.48% WoW to 23.16%. This was driven by repricing in the NT-bills market. Likewise, the FGN bond market witnessed gloomy sentiment as the average yields rose by 0.02% WoW to close at 19.10%. This was driven by selloffs in the short and mid-term bonds. Overall, average yield in the Naira fixed income market increased by 0.25% WoW to close at 21.13%. Looking ahead, we may see the uptrend in yields continue, due to tight liquidity conditions and the absence of significant liquidity inflows

Strategy

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

Click here for full report

Click here for Stock Recommendation