Profit-taking drags NGX bonds market by 0.11% as ETP segment records uptick in trading activity

By Seun Ibiyemi

The fixed income market on the Nigerian Exchange Limited (NGX) witnessed a mild downturn during the week as market capitalization for bonds dipped by 0.11 per cent to N51.45 trillion, driven largely by profit-taking following weeks of sustained buying pressure.

Data obtained from the NGX showed that the slowdown came after an earlier rally in the bonds market, as investors opted to lock in gains amid moderating yields and cautious sentiment.

Conversely, the Exchange Traded Products (ETPs) segment recorded a modest rebound in both value and volume of trades at the close of trading on Friday, October 17, reflecting renewed investor appetite for diversified investment instruments.

During the week, total bond transactions fell sharply to 448,601 units valued at N381.846 million across 28 deals, compared with 984,209 units worth N883.357 million traded in the previous week. 

The drop underscored a shift in sentiment as investors adjusted positions following yield declines across the fixed-income space after the Central Bank of Nigeria (CBN) eased rates at its September Monetary Policy Committee (MPC) meeting.

The FGSUK2027S3 instrument dominated trading in the fixed-income segment, accounting for 399,636 units valued at N332.96 million in 15 deals. 

Other actively traded instruments included FGSUK2033S6 with 22,201 units worth N20.60 million, and FGSUK2032S5, which saw 11,255 units exchanged for N11.82 million.

Shorter-term bonds such as FGS2028S9, FGS2028S4, and FGS2028S8 recorded limited demand, mirroring waning interest in medium-tenored maturities as yields moderated across the curve.

Meanwhile, the ETP segment showed stronger momentum, with trading volume surging to 202,526 units across 556 deals, up from 147,745 units in 372 deals the previous week. 

The total value traded also climbed to N24.917 million, compared with N24.075 million recorded a week earlier.

Leading activity in the ETP space was LOTUSHAL15, which accounted for 132,933 units valued at N13.10 million across 123 deals. 

It was followed by STANBICETF30, which traded 12,648 units worth N6.62 million in 225 deals, and VETGRIF30, which posted 37,177 units valued at N1.99 million in 89 deals.

Other traded products included VETBANK, VSPBONDETF, and GREENWETF, though with lower turnover levels. 

Reflecting the uptick in activity, ETPs market capitalisation rose by 0.78 per cent to N32.19 billion, indicating growing investor confidence in exchange-traded instruments.

Cumulatively, both the bonds and ETP segments recorded a combined transaction value of N406.76 million during the week, with bonds contributing N381.85 million and ETPs accounting for N24.92 million.