Nigerian stocks record biggest weekly fall in 8-years

ABUJA: Nigerian stocks recorded their biggest weekly fall in 8-years on Friday, as investors anticipated a rise in debt yields after the government laid out plans to borrow more on the domestic market.

Nigerian stocks had been rising since October with investors shifting into equities after two interest rate cuts last year and excess naira liquidity on money markets due to historic low yields on the debt market.

The all-share index, which rose 50% in 2020, shed 3.04% this week, the most since July 2013. Stocks dropped to 40,439.85 points on Friday, down 1.4% at a one-month low following eight days of losses.

The government on Thursday approved plans to trim offshore borrowings, in a new debt strategy, to strengthen domestic markets over the next three-years.

Analysts say local funds could pull out of equities.

At an open market Treasury auction on Thursday, investors sought one-year yields as high as 13%, traders said, after the central bank almost doubled the rate to 11.22% last week. Yields traded close to zero last year.

The central bank has been exploring ways to attract dollars into Nigeria to support the currency and stimulate growth following a recession without devaluing the naira, which could further stoke double-digit inflation.

Analysts said renewed inflows into the local debt market were being held back by the currency, especially with some investors trapped in Nigeria amid a pause in central bank's intervention on the spot market.

Shares of five companies fell on Friday while 27 advanced and another 100 recorded no trades.

Animal feeds maker, Livestock Feeds Plc shed 9.78%. Clinker mixer BUA Cement fell 7.22% while Dangote Cement dropped 3.51% and MTN Nigeria was down 0.49%.