Nigeria’s equity market faced a daunting setback as investors lost N481 billion in a single trading day, largely attributed to sell-offs and a notable shift in interest towards Treasury Bills.
The move, which saw a record N1.8 trillion worth of treasury bills sold at auction, almost double the initial offer of N1 trillion, underscores a change in investor sentiment and strategy.
According to Tunde Amolegbe, Managing Director of Arthur Steven Asset Management, this surge in demand for Treasury Bills reflects investors’ growing confidence in the current government and its reform initiatives.
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Amolegbe remarked, “Investors are seeking higher rates for funding due to CBN signaling further tightening amidst accelerating inflation and other factors.”
The auction results revealed a notable preference for the one-year T-bill, with investors offering N1.87 trillion for the N600 billion on offer, resulting in an allotment of N908.75 billion at a stop rate of 19 percent.
Bid rates ranged between 13 percent and 29.9 percent, indicating a diverse range of investor expectations and strategies. While the Treasury Bills market witnessed a flurry of activity, the equity market experienced a downturn, with the All-Share Index and market capitalization dipping by 0.86 percent, closing at 101,227.66 points and N55.39 trillion, respectively.
Investor sentiment remained predominantly negative, with only seven gainers compared to 54 losers. Despite the equity market’s woes, certain stocks managed to buck the trend, with Meyer Plc, Juli Plc, and Tantalizer recording notable gains.
However, Nascon Allied Industries, Unity Bank, and Consolidated Hallmark Plc led the losers’ chart. The day’s market activity was characterized by a significant increase in traded units, valued at N7.17 billion, representing a 39.91 percent surge in volume and an 11.97 percent increase in value compared to the previous day.
Transcorp Plc, Zenith Bank, and United Bank for Africa emerged as the primary volume and value drivers, signaling continued investor interest in select equities despite the broader market downturn.