ASI rallies late to send market positive w/w
15 October 2018 : Following another mildly positive trading session on the exchange (+12bps), the NSE All-Share Index closed the week with a modest +23bps w/w close. Three of the four key sectors finished in the green, with small-cap stocks dominating trading in a quiet day for heavyweights. The Consumer Goods (d/d: +34bps w/w : -72bps) and Oil and Gas (d/d: +12bps; w/w:-88bps) sectors came out marginally on top at week close, however still posting losses w/w following declines recorded earlier in the week – major movers were INTBREW (d/d: +492bps; w/w:-154bps), NB (+353bps; w/w: -190bps), OANDO (d/d:+100bps; w/w:-288bps). Meanwhile, the Banking sector (d/d: +32bps; w/w:+82bps) also gained on the day thanks to upticks in ZENITHBANK (d/d: +68bps; w/w:+ 302bps) and UBA (d/d:+62bps; w/w:-122bps). Finally, the Industrial Goods sector was the sole loser at week close, moderating 6bps (w/w: +33bps) following losses in small-cap CUTIX (d/d:-993bps: w/w:-17.55%).
• Though closing positions for the week indicate a positive tilt to trading, thin volumes and weak investor appetite signal still damp sentiment and as such analysts foresee more mixed closes in the week ahead.
• Stock Watch: After gaining 10% in Friday’s session alone for a 17% w/w gain, WEMABANK closed at N0.66 on Friday. This represents a 27% return YTD, far outperforming the Banking index (-13%) and making it one of the best performing Tier-II banking names.
Market closes negative amid liquidity strain
• With system liquidity still tight following yesterday’s OMO sale of N250 billion (N300 billion offered), the interbank call rate rose from 9.00% to close at 19.17%.
• Despite a bearish close to the week (+4bps d/d), trading in the T-bills was slightly positive as yields moderated 4bps on average. Tday’s yield advances were on the longer-dated maturities—yields on the 335DTM and 342DTM bills advanced 37bps and 34bps to settle at 15.40% and 15.17%. However, buying was weighted on the short term bills as yields on the 13DTM and 62DTM bills declined 48bps and 44bps to settle at 12.58% and 12.42% respectively. On the other hand, the bond space was more clearly negative as yields rose 5bps d/d and 7bps w/w amid sell-offs on long-dated maturies. Particularly, yields on the 13.98% FGN FEB 2028 and 12.15% FGN JUL 2034 bonds advanced 15bps and 12bps to settle at 15.25% and 15.26% respectively. Notably, mild demand was observed on mid-term bonds as the yield on the 16.39% JAN 2022 bond declined 6bps to settle at 14.41%.
• As a result of tight liquidity following aggressive mop ups during the week, analysts expect tepid trading in the fixed income market at week open.
• The CBN continued its intervention in the Foreign Exchange market, injecting $210 million into the various FX windows on Wednesday. Amid this, the naira appreciated N0.10 w/w at the I&E FX Window to settle at N363.82 against the dollar and depreciated N0.50 to settle at N360.00 in the parallel market.
• Analysts expect the naira to remain stable across the various windows of the currency space as the CBN continues to intervene in the FX market.
• The Board of Directors of Stanbic IBTC Holdings Plc has notified the Nigerian Stock Exchange that a meeting of its board has been scheduled for 26 October 2018 to discuss and approve the group’s unaudited financial statements for the period ended 30 September 2018.
• The Board of Directors of Morison Industries Plc has notified the Nigerian Stock Exchange that a meeting of its board has been scheduled for 25 October 2018 to discuss and approve the group’s unaudited financial statements for the third quarter ended 30 September 2018
• The Board of Directors of The Initiates Plc has notified the Nigerian Stock Exchange that a meeting of its board has been scheduled for 26 October 2018.
Reporting for EasyKobo on Monday ,15 October 2018 in Lagos, Nigeria
Source: Vetiva Capital Management Limited
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