Nigerian bourse continued its bearish trend, taking no rest from previous week losses as the ASI dipped further by 1.27% to 24,026.05 index points on Monday.  

Market capitalization shed N161.59 billion to settle at N12.533 trillion. Accordingly, the Month-to-Date and Year-to-Date losses increased to -1.85% and -10.52%, respectively. 

Activity levels closed strong, compared to the previous trading session, as total volume and value increased by 31.45% and 83.21% to 189.69million units and N2.78billion respectively. GUARANTY was the most traded by volume and value at 60.46million units and N1.27billion. 

Market sentiment, as measured by market breadth, was negative as 17 tickers declined, relative to 14 gainers. BETAGALSS and JBERGER were the top losers of the day with 9.95% and 9.81% price decline, while NAHCO and ZENITHBANK topped the gainers with 10.00% and 5.25% appreciation in share value. 

Performance across sectors mirrored the broad index as three out of the five major sub-indexes we cover posted losses. Price appreciation in ZENITH and GUARANTY spurred a +1.51% gain in the Banking Index, trailed by the Insurance Index, which appreciated by 1.05%, as CORNERSTONE & AIICO INSURANCE gained.  

The Consumer goods index led the laggards with (-3.18%), on Nestle -6.51% decline.  The Industrial Index -2.35% followed, due to losses in BUACEMENT (-5.00%), while the Oil and Gas index declined distantly by- 0.04%, impelled by losses in OANDO. 

 READ MORE: Analysis: Seplat’s transfer of OMLs has us wary 

Top gainers 

NAHCO up 10.00% to close at N2.2, ZENITHBANK up 5.25% to close at N16.05, FLOURMILL up 5.11% to close at N18.5, UBN up  1.87% to close at N5.45, GUARANTY up 0.96% to close at N21. 

Top losers 

BETAGLAS down 9.95% to close at N61.55, JBERGER down 9.81% to close at N16.55 NESTLE down 6.51%  to close at N1175, BUACEMENT down 5.00% to close at N39.9, CILEASING down 8.43% to close at N3.8,  

Download the Nairametrics News App

Outlook 

Blue-chip heavyweights, BUACEMENT, NESTLE dragged the Nigerian bourse lower on Monday’s trading session, as market liquidity improved slightly. Nairametrics recommends cautious buying as economic uncertainty strengthens amidst Q2 earning result season. 

Gold futures rose even higher on Monday, led partly by a weakening U.S. dollar amidst rallies of global stocks.  As measured by the ICE U.S. dollar index DXY, -0.37%, the U.S. dollar was off 0.4%. The implication of a weaker U.S. dollar is that assets that are priced in the currency will become more attractive to buyers that employ other monetary units.  

Global stocks had rallied as a result of a surge in Chinese markets as Beijing’s state-run media put out a front-page editorial that encouraged investors to buy stocks towards supporting domestic markets. Yet, the increase in COVID-19 cases in the U.S has left investors unsure. 

READ MORE: Tariff Hike postponed till first quarter of 2021

Adrian Ash, director of research at BullionVault explained that, “Bullion prices don’t typically jump because of social unrest or geopolitical strife. But if those stresses add to a financial crisis or economic slump, gold prices can spiral higher.” 

For these reasons, gold futures in August rose $2.90, or 0.2%, at $1,792.90 an ounce, following the end of the most-active contract on Thursday according to FactSet data.  

READ MORE: Gold futures reach two-months high over rising COVID-19 cases  

The price of gold had experienced a level of pressure, temporarily losing its gains which had risen as high as $1,799 a little after the economic data released Monday showed that the Institute for Supply Management’s index of nonmanufacturing companies increased to 57.1% in the month of June from the 45.4% attained in May. This was the single largest increase since the commencement of the survey as far back as 1997.  

Ash noted that “It’s hard to see what stops gold reaching new highs from here.”  

In just three days, fast-growing cryptocurrency, USDC, a stable coin project founded by Circle and Coinbase, just released 50 million digital coins from its treasury to various wallets in less than 72 hours. Data compiled from Whale Alert, an advanced blockchain tracker, and analytics system showed the time these transactions took place.

According to Coinbase a leading American based crypto exchange, the consortium that mints USDC, collectively holds US$1.00 for every single USDC. These funds are held in a special bank account that is constantly monitored and audited.

Explore the advanced financial calculators on Nairametrics

Crypto lovers continued to troop to stablecoins, as USD Coin’s (USDC) market cap broke the $1 billion market capitalization threshold for the first time since the stablecoin was launched in October 2018.

Quick Fact: USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open-source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio.

READ MORE: Coinbase, Binance, and Kraken Lead in Blockchain Merger & Acquisition Deals

Things you must know: Investors of stablecoins make money by earning dividends from the newly created digital coins being given to them for holding such stablecoin stock.