Nigeria’s equity market took a hit on Thursday as investors shifted their attention towards Treasury Bills, resulting in a loss of approximately N481 billion at the close of trading.
The primary market auction held on Wednesday saw a surge in interest in Treasury Bills, particularly the one-year option, which witnessed a rise in yield to 19 percent.
Speaking on the demand for Treasury Bills, Tunde Amolegbe, the Managing Director of Arthur Steven Asset Management, expressed optimism, stating, “Investors are seeking higher rates for funding due to CBN signaling further tightening amid accelerating inflation and other factors.” He highlighted investors’ confidence in the government and its reforms as a driving force behind the surge in demand.
The auction itself saw Nigeria selling a record N1.8 trillion worth of Treasury Bills, nearly double the initial offer of N1 trillion, underscoring the overwhelming investor interest. This surge in demand is seen as a vote of confidence in the current government and its reform initiatives.
However, the enthusiasm for Treasury Bills had a notable impact on the equity market, with the All-Share Index and market capitalization experiencing a decline of 0.86 percent, closing at 101,227.66 points and N55.39 trillion, respectively. Market sentiment was predominantly negative, with only seven gainers compared to 54 losers.
Despite the market turmoil, some stocks managed to buck the trend, with Meyer Plc, Juli Plc, and Tantalizer recording notable gains. Conversely, Nascon Allied Industries, Unity Bank, and Consolidated Hallmark Plc led the losers’ chart.
The day’s market activity was driven by significant trading volume and value, with Transcorp Plc, Zenith Bank, and United Bank for Africa emerging as the top performers in terms of volume and value.
As investors navigate the evolving market landscape, the surge in Treasury Bill demand signals a growing confidence in government policies and reforms, albeit at the expense of short-term equity market performance.