Despite the resurgence of activities in the secondary market triggered by the drop in inflation rate for February released recently by the National Bureau of Statistics (NBS), the expected yield on the FGN Bonds was on the downside last week according to market reports.

Investors that invested in the market earlier in March in anticipation of the surge in inflation rates in February were disappointed as there was decline in most of the liquid bonds. Market analysts say the decline was due to the fact that inflation erodes the power of bond’s future cashflows.

The 7th series bond, for instance, depreciated to 15.25 per cent last Friday as against the 15.46 per cent it opened the week even as the yields on the 5th series 2 bond dropped to 15.19 per cent on Friday from 15.36 per cent that it opened the week.

Also, the yields on the 9th series decreased to 15.41 percent on the same day compared with the 15.44 per cent that it opened the week under review.

In volume terms, activities in the bond market was driven by the monthly auction which took place on Wednesday, 28 March during which two bonds were offered. They were the 7.00 October 23, 2019 (N20 billion ) and 16.39 January 27, 2022 (30 billion). They were re-opened at Marginal rates of 15.30 percent and 15.41 percent while their subscription levels 216.50 per cent and 127.00 percent respectively.

Also, there was an additional (N50 billion of 16.39 January 27,2022 allotted on a non-competitive basis. The marginal rates during auction was at a lower ebb against expectation as yields in the market dipped across several short-to-medium term maturities, the highest being the 12 month treasures that dropped 67 basis points according to market reports.

Transactions over-the-counter Bond Market recorded a total of 116 million units valued at N101.6 billion in 1,029 deals last week up from a total of 91.23 million units in 875 transactions in the week which ended March 22, 2012.

Specifically, the most traded bond which measured by volume was the 16.39 percent  FGN January 2022 (9th FGN bond 2022 series 1) with a recorded volume of 23.25 million valued sold at N24.8 billion 311 transactions.

The 10.50 percent FGN March 2014 (eight FGN Bond 2014 series 1) followed with a traded volume of 22.56 million units at the value of N20.9 billion exchanged in 220 deals.

According to the Nigerian Stock Market report there was no transaction through the Stock Market in the federal government development stocks, State Government Bonds and Industrial Loans/Preference Stocks Sectors. The Equities sector of the market recorded a total transaction of 1.443 billion units of shares valued at N11.53 billion traded in 18,849 deals compared with a total of 1.212 billion units of shares traded at N15.7 billion exchanged in 17,979 deals the previous week.

The financial service sector the report said, accounted for 1.13 billion units of shares at the value of N7.03 billion recorded in 10,896 deals while the consumer Goods Sector followed with 74.34 million shares valued at N2.9 billion traded in 3,324 deals.

On the price movement chart, the NSE All-share Index shed 2.6 percent to close at 20,652.47 basis points while the market capitalisation of listed equities finished lower at N6.55 trillion.

The NSE-30 Index dipped by 3.5 per cent to close at 938.84 points. Only one out of the four sectorial indices appreciated during the week under review.

The NSE-Insurance Index appreciated by 3.4 per cent to end the week at 124.28 points even as the NSE-Consumer Goods Index dropped by 2.23 per cent to close at 1,708.04 points.

The NSE-Banking Index nose dived by 6.6 percent to finish at 283.04 points.

In the quarterly analysis of the nation’s stock market, the market dipped by 0.38 per cent for the first quarter as the index fell from 20,730.63 to close at 20,652.47 points while the market capitalisation of listed equities added N16 billion to close higher at N6.549 trillion.

Vivian-Peace Nwinaene