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March 3, 2021

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Nigerian stocks extend loss as fixed-income yields draw investors away

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Nigerian equities entered the fourth day of a slide on Friday, dropping by 0.06 per cent as week-to-date loss topped N130 billion and investors continued to cast their glances in the way of improving yields in fixed income securities.

The bourse of Africa’s biggest economy has been caught in a tailspin since the start of February with 13 out of the 15 trading sessions recorded so far ending in losses.

Investors in the hunt for greater returns on investment are increasingly selling off stocks and ploughing the proceeds in bonds and treasury bills at a time majority of companies’ earnings reports for 2020 are yet to be issued.

“With the latest outcome of the NTB auction pointing towards yield elevation in the near term, we expect investors to trade cautiously while taking positions in stocks with attractive dividend yields,” analysts at broker Cordros Capital said this week.

“As a result, we expect the local bourse to exhibit a zig-zag pattern in the near term as the opposing forces of uptick in yields and full-year 2020 corporate earnings releases dictate market performance.”

Depreciation in the shares of FBN Holdings, Stanbic IBTC and WAPCO was largely responsible for the Friday’s underwhelming performance.

Falls in the insurance and the oil and gas indices by 1.83 per cent and 1.82 per cent respectively also stoked loss.

A negative market breadth was recorded as 20 laggards emerged against 18 gainers.

The All Share Index (ASI) edged lower to 40,186.70 index points, while market capitalisation slipped to N21.026 trillion.

ALSO READ: Naira gains at parallel, I&E markets

Year to date, the index is up by 0.21 per cent.

TOP FIVE GAINERS

Livestock Feeds led gainers, growing by 9.27% to close at N2.24. ABC Portland Paints gained 8.70% to close at N3.25, helped by the progress of its planned merger with CAP Plc.

FTN Cocoa rose by 8.16% to N0.53. United Capital leapt to N6.35 after announcing a N0.70 dividend per share for full year 2020, notching up 6.19% in the process. Africa Prudential completed the top 5, climbing up 5.30% to N7.30 on the strength of board’s proposal of N0.50 dividend per share.

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TOP FIVE LOSERS

Stanbic IBTC topped the losers’ table, declining by 10% to close at N38.70. May & Baker shrank by 9.89% to end trade at N4.19. Multiverse tumbled to N0.22, losing 8.33%. Neimeth dipped to N2.01, recording 7.80% loss. Royal Exchange closed at N0.25, going down by 7.41%.

TOP FIVE TRADES

307.786 million shares worth N2.905 billion were traded in 4,393 transactions.

FBN Holdings was the most preferred stocks on the NSE with 85.579 million units of its stocks worth N624.735 million traded in 134 deals. 53.323 million units of United Capital shares priced at N341.821 million exchanged hands in 645 transactions. UBA had 23.349 million shares valued at N192.946 million traded in 205 deals. Zenith traded 17.575 million shares estimated at N431.955 million in 430 transactions. GTB traded 11.448 million shares valued at N38.557 million in 291 deals.

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