Investors spend N41.5bn on stocks as naira loses N42 in September

September was generally a bearish month for the financial market with the equity market’s index shrinking by 1.6 per cent, though N41.5 billion was invested in stocks. The naira also lost N42 at the parallel market to close at N745 to the dollar during the month.
Analysis by Afrinvest shows that the domestic equities market closed the third quarter of 2022 on a negative note. The weak market sentiment was hinged on worsening economic fundamentals amid rising inflation.
“The benchmark index fell 1.6 per cent month-on-month (m/m) (August: -1.1 per cent m/m) to 49,024.16 points.”
Consequently, YTD return moderated to 14.8 per cent (previously: 16.7 per cent). Meanwhile, total volume and value traded in September grossed 3.6bn units and N41.5 billion respectively. The top traded stocks by volume for the month were JAIZ (606.0 million units), GTCO (511.9 million units), and COURTVILLE (498.9 million units) while MTNN (N22.6 billion), ZENITH (N9.7 billion), and GTCO (N9. billion) led trades by value.
Performance across sectors within our purview was bearish as all the six indices closed in the red. The Insurance and Oil & Gas indices led laggards, down 6.5 per cent and 4.5 per cent m/m respectively following price depreciation in CONERST (-18.8 per cent), LINKASSURE (-9.6 per cent), TOTAL (-10.0 per cent), and OANDO (-5.9 per cent). Also, the Consumer Goods and Banking indices dipped 2.6 per cent and 2.1 per cent m/m sequentially, on the back of losses in HONYFLOUR (-14.3 per cent), VITAFOAM (-11.2 per cent), ZENITH (-8.7 per cent), and ACCESSCORP (-3.0 per cent). Similarly, losses in CWG (-18.2 per cent), BETAGLASS (-10.0 per cent), BERGER (-9.8 per cent) drove the AFR-ICT and Industrial Goods indices down 1.1 per cent and 0.2 per cent respectively.
Investor sentiment, as measured by market breadth, waned to -0.6x from 0.1x recorded last month as 21 stocks gained, 61 lost while 71 were unchanged. The top-performing
stocks for the month were MULTIVERSE (+40.8 per cent), ETRANZACT (+28.0 per cent), and
PHARMDEKO (+17.1 per cent) while LEARNAFR (-24.7 per cent), CORNERST (-18.8 per cent), and CWG (-18. per cent) were the top underperforming stocks.
On the other hand, despite the commencement of third quarter earnings season, it was anticipated that the bearish momentum would persist in October given the expected uptrend in fixed-income yields following the Monetary Policy Rate (MPR) hike.
Accordingly, the naira recorded negative performance across the market segments. At
the parallel market, rates opened at N703.00/$1.00 and closed at N745.00/$1.00,
depreciating 1.8 per cent m/m. Similarly, at the Investors’ & Exporters’ (I&E) Window, the
Naira weakened 6.0 per cent m/m to N437.03/$1.00.
At the FMDQ Securities Exchange (SE) FX Futures Contract Market, the total value of
open contracts rose 6.4 per cent m/m to $4.1 billion, buoyed by the 2,443.5 per cent and 288.8 per cent m/m jump in the contract values of Nigeria’s SEPTE BER and NO E BER 0 instruments with additional subscriptions of $229.9 million and $136.4 million respectively.
“In October, we anticipate extended pressure on the Naira across market segments as weak foreign investment flows and reduced accretion from crude oil sales (due to unabated largescale oil theft) continue to weigh on CBN’s supply capacity.”

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