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Markets

Attractive yields expected to weigh on Nigerian & U.S stocks

Nigerian investors are significantly hunting for consistent returns on investment thus increasingly selling off their equity portfolios.

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The Nigerian stock market continued its bearish streak for the 7th consecutive week as the All-share index dipped by 0.69% to close at 38,382.39 index points.

The total market capitalization also depreciated from N20.221 trillion in the prior week to N20.082 trillion.

Nigerian investors are significantly hunting for consistent returns on investment thus increasingly selling off their equity portfolios and ploughing the proceeds in fixed income instruments at a time yields are hitting yearly highs.

READ: Sell-offs in Bitcoin, Gold, U.S stocks on rising U.S dollar

Though it’s been a tepid end to the week for sovereign bonds as several yields remained unchanged at the close of trades.

The open buy-back and overnight rates doubled to close at 25.00% and 25.50% respectively at their most recent trading session on the back of the CBN’s end-of-week retail FX auction.

Olamide Adeboboye an investment analyst, at FSDH Capital, in an exclusive note to Nairametrics, spoke on the market expectation and investors growing interested in Nigerian yields.

READ: Cryptos: Nigerian financial experts talk risks associated with trading digital assets

She said, “Well….for this week. I don’t see major catalyst (s) for the market. Also bearing in mind that there is a bond auction this week, so investors will likely position to take advantage of the anticipated increase in yields.”

On the foreign side, S&P 500 and Nasdaq rallied high at their most recent trading session as Facebook and energy shares lifted the U.S stock markets value on the account of falling U.S. Treasury yields, but such narrative seems to be changing as the U.S dollar ticked up at the time of writing this report.

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READ: XRP posts a big bang, as legal tussle with SEC lingers

Stephen Innes, Chief Global Market Strategist at Axi in an interview with Nairametrics spoke on prevailing market condition weighing deep on global riskier assets like equities;

“Risk markets are taking a short breather from last week’s risk-off and oil is stabilizing.

Stanbic 728 x 90

“Still, the swift moves in yields showed the Fed’s complacency around upcoming inflation might have unintended and lasting consequences.

“It’s a busy week ahead, so the pause makes sense as markets will continue to digest the reopening boom and higher yields cycle through the lens of a series of crucial and timely PMI releases.”

What to expect: That being said, timing is still everything. The next leg of the reflation will have to be carried more and more by a continued recovery in economic growth, as fiscal and monetary stimulus gets increasingly packed into the prices of global equities.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Cryptocurrency

Bloody Sunday: Over 1 million investors liquidated, altcoins crash by 20%

For the day, about 1,018,638 investors had their account worth about $10 billion liquidated.

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A significant number of investors in the crypto market have had their accounts liquidated amid the sudden drop seen in a number of altcoin assets.

For the day, about 1,018,638 investors had their account worth about $10 billion liquidated. The largest single liquidation order happened on Binance-BTC valued at $68.73 million.

The flagship altcoin is under high selling pressure with Ethereum trading at $1,952 at the time of writing this report, down 21.46% for the day. It is the biggest daily drop since March 12, 2020.

Such a fall pushed Ethereum’s market value to $247.15 billion, or 12.16% of the total cryptocurrency market value. At its highest, Ethereum’s market value was close to $300 billion.

On the altcoins side, the sudden crash at the time of writing this report could not be fully assessed, but market sentiments point to rumours that the U.S. Treasury is planning to charge several financial institutions for money laundering using crypto.

Top cryptos such as XRP lost as much as 21.17%, Polkadot and Litecoin were down by 20%, bitcoin cash down 20% for the day, while dogecoin has lost about 15% in value.

Many weeks ago, leading United Kingdom financial regulator, the Financial Conduct Authority, issued a piece of stern advice on crypto investments. The statement highlighted the risks associated with investing in Bitcoin and other crypto assets and warned the public that there were high chances that all their funds could be lost.

“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.

“Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,” said the FCA.

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That said, a significant number of crypto investors appear to be shrugging off the huge fall as another typical bump on the crypto path, and one which, no doubt, will likely see crypto trading volume return as crypto investors look to buy what many are viewing as a bargain, to buy into what is still very much a bullish run.

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Cryptocurrency

Crypto Armageddon: Over $200 billion wiped off in the Crypto market 

The global crypto market value was put at $2.03 trillion, a 10.42% plunge for the day.

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Crypto

The Crypto is under intense selling pressure amid the recent sell-offs in the cryptoverse, as the fast ever-changing Crypto market lost over $200 billion in value within a few hours.

The flagship crypto was down by more than 5,000 dollars pulling back below $60,000.

At the time of writing this report, the global crypto market value was put at $2.03 trillion, a 10.42% plunge for the day.

The crypto market has shed much of its stellar gains earlier recorded, as significant selling pressure from crypto investors pushed the value of cryptos lower across the market spectrum amid profit-taking.

Other Crypto assets like XRP, Bitcoin Cash EOS, lost as much as 20% within a twinkle of the eyes.

Market pundits argue that a likely factor for such intense drop was the relatively high funding rates for taking long positions on Bitcoin alongside a strong dark cloud built around the $64,000-$65,000 price level.

Adding credence to such bias is Cantering Clark, a popular crypto strategist, who added that recent data points to the market cooling off arbitrarily.

“50k and 80k strikes highest contract/notional for $BTC I think these writers will be happy and I am still in the same opinion that the end of April – May begins the shift that makes Bitcoin a less favourable long. No breakout, just range and rotation.”

Crypto pundits anonymously interviewed by Nairametrics are saying that a market correction was long overdue after the sudden bullish move.

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The bearish trend prevailing at the bitcoin market is largely attributed to a significant amount of profit-taking in play, on the account that Bitcoin’s realized profits are at record highs.

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