By Udeme Ekwere

Experts in the Nigerian capital market have predicted increased activity in the fixed income securities market in the next few weeks.

The analysts said that the increase of the Monetary Policy Rate by the Central Bank of Nigeria, was the main factor that would drive increased activity in the bond market.

For instance, the Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, noted in the company’s Bi-monthly Economic and Business Update, on Monday, that the move had already caused investors to focus more on the fixed income market, rather than the equity market.

He said, “The increase in the MPR led investors to shift base from equities to fixed income securities as a mild sell-off of stocks took place in reaction to the move resulting in a 0.45 per cent dip of the Nigerian Stock Exchange’s All-Share Index in one day.

“Volume and value of equities traded has declined by 19.5 per cent and 12.5 per cent in under a two-week period since the hike, while the ASI had declined by 3.81 per cent year-to-date and average inter-bank rate has recorded an increase of 140 basis points year to date.”

He noted in the report that the trend was expected to be maintained in the next few weeks, which would, in turn, boost the bond market.

“As a result, fund managers could see switching mandates from clients seeking to reduce stock holdings to take positions in fixed income securities. The positive real returns and stability offered by bonds are not expected to reverse anytime soon and this could be the pulling factor,” he stated.

The report noted that the issues regarding the nationalised banks also did much to affect the equities market negatively last week, with equities shedding significant weight.

He, however, noted that the market might recover soon as things become clearer to investors.

Explaining further, Rewane said, “The NSE was further roiled (shaken) by the unexpected nationalisation of three systemically relevant banks last week. The banks affected were Bank PHB Plc, Afribank Plc and Spring Bank Plc, bringing the total value of losses to investors to N29.675bn. This is approximately 0.4 per cent of the market capitalisation.

“We, however, expect steady recovery from losses once the grey areas surrounding the rescued banks are sorted out. The impact on stakeholders will become evident in coming weeks as the intentions of the Asset Management Company of Nigeria and the Nigeria Deposit Insurance Corporation crystalises.

Corroborating this, analysts at Vetiva Capital Management Limited, in their report on Friday, noted that the market had, last week, reacted to various activities in both the local and global polity.

They, however, predicted increased activity this week, stressing that, “Based on the past week’s closing bid positions for key large-caps at attractive bargain prices, which offer investors an opportunity to build their stock portfolios, the outlook for the coming week is bright.”

Source: Punch

By Udeme Ekwere

Experts in the Nigerian capital market have predicted increased activity in the fixed income securities market in the next few weeks.

The analysts said that the increase of the Monetary Policy Rate by the Central Bank of Nigeria, was the main factor that would drive increased activity in the bond market.

For instance, the Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, noted in the company’s Bi-monthly Economic and Business Update, on Monday, that the move had already caused investors to focus more on the fixed income market, rather than the equity market.

He said, “The increase in the MPR led investors to shift base from equities to fixed income securities as a mild sell-off of stocks took place in reaction to the move resulting in a 0.45 per cent dip of the Nigerian Stock Exchange’s All-Share Index in one day.

“Volume and value of equities traded has declined by 19.5 per cent and 12.5 per cent in under a two-week period since the hike, while the ASI had declined by 3.81 per cent year-to-date and average inter-bank rate has recorded an increase of 140 basis points year to date.”

He noted in the report that the trend was expected to be maintained in the next few weeks, which would, in turn, boost the bond market.

“As a result, fund managers could see switching mandates from clients seeking to reduce stock holdings to take positions in fixed income securities. The positive real returns and stability offered by bonds are not expected to reverse anytime soon and this could be the pulling factor,” he stated.

The report noted that the issues regarding the nationalised banks also did much to affect the equities market negatively last week, with equities shedding significant weight.

He, however, noted that the market might recover soon as things become clearer to investors.

Explaining further, Rewane said, “The NSE was further roiled (shaken) by the unexpected nationalisation of three systemically relevant banks last week. The banks affected were Bank PHB Plc, Afribank Plc and Spring Bank Plc, bringing the total value of losses to investors to N29.675bn. This is approximately 0.4 per cent of the market capitalisation.

“We, however, expect steady recovery from losses once the grey areas surrounding the rescued banks are sorted out. The impact on stakeholders will become evident in coming weeks as the intentions of the Asset Management Company of Nigeria and the Nigeria Deposit Insurance Corporation crystalises.

Corroborating this, analysts at Vetiva Capital Management Limited, in their report on Friday, noted that the market had, last week, reacted to various activities in both the local and global polity.

They, however, predicted increased activity this week, stressing that, “Based on the past week’s closing bid positions for key large-caps at attractive bargain prices, which offer investors an opportunity to build their stock portfolios, the outlook for the coming week is bright.”

Source: Punch

By Udeme Ekwere

Experts in the Nigerian capital market have predicted increased activity in the fixed income securities market in the next few weeks.

The analysts said that the increase of the Monetary Policy Rate by the Central Bank of Nigeria, was the main factor that would drive increased activity in the bond market.

For instance, the Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, noted in the company’s Bi-monthly Economic and Business Update, on Monday, that the move had already caused investors to focus more on the fixed income market, rather than the equity market.

He said, “The increase in the MPR led investors to shift base from equities to fixed income securities as a mild sell-off of stocks took place in reaction to the move resulting in a 0.45 per cent dip of the Nigerian Stock Exchange’s All-Share Index in one day.

“Volume and value of equities traded has declined by 19.5 per cent and 12.5 per cent in under a two-week period since the hike, while the ASI had declined by 3.81 per cent year-to-date and average inter-bank rate has recorded an increase of 140 basis points year to date.”

He noted in the report that the trend was expected to be maintained in the next few weeks, which would, in turn, boost the bond market.

“As a result, fund managers could see switching mandates from clients seeking to reduce stock holdings to take positions in fixed income securities. The positive real returns and stability offered by bonds are not expected to reverse anytime soon and this could be the pulling factor,” he stated.

The report noted that the issues regarding the nationalised banks also did much to affect the equities market negatively last week, with equities shedding significant weight.

He, however, noted that the market might recover soon as things become clearer to investors.

Explaining further, Rewane said, “The NSE was further roiled (shaken) by the unexpected nationalisation of three systemically relevant banks last week. The banks affected were Bank PHB Plc, Afribank Plc and Spring Bank Plc, bringing the total value of losses to investors to N29.675bn. This is approximately 0.4 per cent of the market capitalisation.

“We, however, expect steady recovery from losses once the grey areas surrounding the rescued banks are sorted out. The impact on stakeholders will become evident in coming weeks as the intentions of the Asset Management Company of Nigeria and the Nigeria Deposit Insurance Corporation crystalises.

Corroborating this, analysts at Vetiva Capital Management Limited, in their report on Friday, noted that the market had, last week, reacted to various activities in both the local and global polity.

They, however, predicted increased activity this week, stressing that, “Based on the past week’s closing bid positions for key large-caps at attractive bargain prices, which offer investors an opportunity to build their stock portfolios, the outlook for the coming week is bright.”

Source: Punch

By Udeme Ekwere

Experts in the Nigerian capital market have predicted increased activity in the fixed income securities market in the next few weeks.

The analysts said that the increase of the Monetary Policy Rate by the Central Bank of Nigeria, was the main factor that would drive increased activity in the bond market.

For instance, the Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, noted in the company’s Bi-monthly Economic and Business Update, on Monday, that the move had already caused investors to focus more on the fixed income market, rather than the equity market.

He said, “The increase in the MPR led investors to shift base from equities to fixed income securities as a mild sell-off of stocks took place in reaction to the move resulting in a 0.45 per cent dip of the Nigerian Stock Exchange’s All-Share Index in one day.

“Volume and value of equities traded has declined by 19.5 per cent and 12.5 per cent in under a two-week period since the hike, while the ASI had declined by 3.81 per cent year-to-date and average inter-bank rate has recorded an increase of 140 basis points year to date.”

He noted in the report that the trend was expected to be maintained in the next few weeks, which would, in turn, boost the bond market.

“As a result, fund managers could see switching mandates from clients seeking to reduce stock holdings to take positions in fixed income securities. The positive real returns and stability offered by bonds are not expected to reverse anytime soon and this could be the pulling factor,” he stated.

The report noted that the issues regarding the nationalised banks also did much to affect the equities market negatively last week, with equities shedding significant weight.

He, however, noted that the market might recover soon as things become clearer to investors.

Explaining further, Rewane said, “The NSE was further roiled (shaken) by the unexpected nationalisation of three systemically relevant banks last week. The banks affected were Bank PHB Plc, Afribank Plc and Spring Bank Plc, bringing the total value of losses to investors to N29.675bn. This is approximately 0.4 per cent of the market capitalisation.

“We, however, expect steady recovery from losses once the grey areas surrounding the rescued banks are sorted out. The impact on stakeholders will become evident in coming weeks as the intentions of the Asset Management Company of Nigeria and the Nigeria Deposit Insurance Corporation crystalises.

Corroborating this, analysts at Vetiva Capital Management Limited, in their report on Friday, noted that the market had, last week, reacted to various activities in both the local and global polity.

They, however, predicted increased activity this week, stressing that, “Based on the past week’s closing bid positions for key large-caps at attractive bargain prices, which offer investors an opportunity to build their stock portfolios, the outlook for the coming week is bright.”

Source: Punch