Results were mixed across the financial markets this week. Equities continued their bearish trend, while yields on treasury bills continue to drop in tandem with inflation. Crude oil prices hit a new high.
Here is an extensive look into how the markets fared this week.
Equity markets
Equity markets closed the week on a negative note, as the All Share Index closed the week in the red down 1.34%. Year to date returns have since dropped to 5.83%. A total turnover of 1.457 billion shares worth N23.666 billion in 19,674 deals were traded this week.
Sovereign Trust Insurance was the top gainer with a 30% increase, Mutual Benefits Assurance was next with a 17.86% gain, and NPF Microfinance Bank rounds up the top 3 with a 10.24% gain.
Sovereign Trust Insurance had significant trading volume during the week, indicating that an investor may be taking position.
Mutual Benefits last week announced a proposed dividend of N0.02; its first in close to a decade.
On the losers side, Japaul Oil and Maritime Plc led the losers with a 25% drop. Skye Bank followed with a 19.15% decline, while Diamond bank rounded up the top 3 losers with an 18.42% loss.
FX market
A total of $503 million was pumped into the FX market by the Central Bank of Nigeria (CBN) through its wholesale Secondary Market Intervention Scheme (SMIS) window. The naira closed the week at N305.85 at the official CBN rate, while the parallel markets closed at N362 to a dollar.
Foreign exchange reserves remained largely unchanged at $47.7 billion within the week.
Money market
The CBN this week carried out a Primary Market Auction. N53.7 billion worth of treasury bills were offered this week comprising N3.3 billion worth of 91-day bills, N16.9 billion worth of 182-day bills and N13.5 billion worth of 364-day bills.
Stop rates for the 91-day, 182-day and 364-day bills were 10%, 10.5% and 10.7% respectively. Despite this, all offers were fully allotted.
Crude oil
Crude oil prices this week hit $80 a barrel for the first time in nearly 4 years. This was due largely to geopolitical tensions arising from President Donald Trump’s reinstatement of sanctions on Iran.
If the current momentum is maintained, the NSE could witness an uptick next week. There exists some correlation between crude oil prices and the performance of the All Share Index. Higher prices mean an increase in foreign reserves, as well as FX liquidity. This increases confidence of foreign investors, who play a key role in the NSE.
Operators in the upstream part of the oil and gas space namely, Seplat and Oando could witness significant movement in their shares next week. Higher oil prices should lead to increased profit, provided Forcados’ repairs are concluded on time.