Weekly Nigerian market performance (May 3, 2024)

This week offered a dynamic picture for Nigerian investors, with contrasting performances across equities, fixed-income, and currency markets. Here’s a closer look at the key trends that unfolded between April 28th and May 3rd, 2024.

Equities Market Rebounds:

The Nigerian stock market had a good week after several weeks of decline. The main index, called the All-Share Index, went up by 1.46% to close at 99,587 points. This is the first time the market has gone up since March.

Banks were part of the reasons for the market’s improvement. After a tough few weeks, bank stocks like Zenith Bank (+6.13%) and GT Holding (+7.32%) saw significant increases. This helped offset some losses in other companies like Seplat, Dangote Sugar, and Nigerian Breweries. MTN Nigeria rose 6.44% during the week.

Earlier, there was a fear that banks might sell more shares (dilute) to raise money, which made some investors nervous. But this week, the performance of bank stocks showed a renewed confidence in the sector.

With this week’s gains, the year-to-date return for the Nigerian stock market is now at a healthy 33.18%. The total value of all the companies listed on the stock market (market capitalization) also went up by ₦811.48 billion to ₦56.32 trillion.

Naira Fall:

The Naira took a beating after a few weeks of strong performance. The currency traded at over N1400 to the dollar last week, down from N1,100 it strengthened two weeks ago. At the official market, the currency closed at N1400.40 on Friday.

The performance has fuelled concerns about the naira resuming the level of instability to pushed it down to more than N1800 in February. The CBN managed to inject some stability through multiple measures including selling dollars directly to bureaux du change.

The central bank’s efforts to stabilize the Naira are closely monitored by market participants.

Fixed-Income Market Performance:

The fixed-income or bond market exhibited a relatively muted performance this week. Yields on government bonds saw minimal movement, indicating a cautious wait-and-see approach from investors.

The March 2027 bond gained 0.22 basis points to deliver a yield of 19.45% during the week, while the Feb. 2034 fell 0.27 basis points to deliver a yield of 19.36%.

The 8 August 2024 treasury bill gained 0.18 basis points to deliver a yield of 19.07%, while 24 October treasury bill fell 0.08 basis points to deliver a yield of 20.57%.