By Nkiruka Nnorom

Investment analysts have said that the outcome of the N150 billion bonds to be offered by the Debt Management Office (DMO) this week will   shape the direction of the equities market and thus act as the major driver of activities in the market.

They,   however, said that investors would trade cautiously even as they position ahead of the 2020 full year financial results of   quoted companies.

The DMO will be offering instruments worth N150 billion through re-openings of the 12.50 per cent FGN bonds maturing in January 2026, 16.24 per cent FGN APR 2037 and 12.98 per cent FGN MAR 2050 bonds. 

In their projections for the week, analysts at Cordros Capital, said: “We expect investors to trade cautiously whilst taking positions in stocks with attractive dividend yields ahead of 2021 full year dividend declarations.

READ ALSO: DMO to raise N250bn from Sukuk bond before year-end

  “In addition, we believe the outcome of the bond auction scheduled to hold during the week will also shape market sentiments.”

On yields in the fixed income market, they said: “In the short-term, we expect yields to hover around current levels, given our expectations of limited supply in the fourth quarter (Q4’21) and deliberate efforts by the DMO to reduce the government’s domestic borrowing cost.”

Also analysts at Cowry Asset Management, said: “We expect the local bourse index to close northwards as investors take advantage of some fundamentally sound stocks which have shed value. Also, we feel investors will continue to position in those companies that have printed higher profitability and are likely to pay good dividends in full year 2021.”

Meanwhile, the domestic equities market closed in positive territory last week amidst renewed investors’ interest in telecom giants in line with analysts expectations.  

Specifically, the share prices of Airtel Africa Plc and MTN Communication Nigeria Plc rose by 12.8 percent and 8.8 percent respectively to close at N871.70 and N191 per share following the excitement that greeted the announcement of Payment Service Bank (PSB) licence approval by the Central Bank of Nigeria (CBN).

Also, buy interests in Neimeth Pharmaceuticals Plc, (12.50%), Redstar Express Plc (12.18%), FTN Cocoa Plc, 10 percent and Unilever Nigeria Plc (9.36%) lifted the NGX All Share Index (ASI) by 2.95 percent to close at 43,253.01 points.

Similarly, the market capitalisation of all listed equities rose by 2.95 percent to close at N22.572 trillion, resulting in N646 billion gains to investors.

Performance was mixed across sectors as the banking (-1.3%), insurance (-2.2%), and the oil and gas sectors (-0.7%) declined while the consumer goods (+0.6%)   sector emerged the sole gainer. The industrial goods sector closed flat.

Vanguard News Nigeria