Kelechukwu Mgboji 
Nigeria’s stock market suffered heavy losses amounting to N671.16 bilion on Thursday after investors migrating to fixed income securities offloaded significant shares of heavily capitalised Dangote Cement (-10.00%).
The losses recorded by the affected stocks wiped off gains in heavyweight, SEPLAT (+10.00%), MTNN (+0.16%), and GTCO (+1.78%), leaving the benchmark Al Share Index, which measures stock performance, down by 1.2 per cent or 119 basis points to 97,064.42 points while market capitalisation dropped by N671.16 billion to close at N55.78 trillion.
Consequently, the Month to-Date and Year-to-Date returns printed -1.5 per cent and +29.8 per cent, respectively. What the equities market lost, fixed income market gained, indicating investors’ preference for bonds and treasury bills where yield look quite inviting since after the Central Bank of Nigeria (CBN) further raised interest rate to an unprecedented high for 27.25 per cent in September meeting of the Monetary Policy Committee (MPC).
CBN’s hawkish monetary policy has been the major driver of activities in Nigeria’s financial market. Consequently, as investors sell off Dangote Cement and other shares at the equities segment of the market, many are moving over to the money market currently booming with yields that keep investors coming.
Thus, in the Treasury bond secondary market on Thursday, yield or interest rose by 16 basis points to 18.8% indicating that government is borrowing at higher cost. Across the benchmark curve, the average yield expanded at the short (+29bps), mid (+8bps), and long (+13bps) segments due to profit-taking activities on the APR-2029 (+128bps), JUL-2030 (+41bps), and JUN2038 (+85bps) bonds, respectively.
