ASI records steepest d/d losses since December 2016 

The Nigerian Stock Exchange was at the mercy of the bears yet again even as the ASI closed both the day (-338bps) – the steepest d/d loss since December 2016 - and week (-638bps) in the red. It was also the fourteenth straight session of declines and fifth consecutive w/w decline. The analysts highlight that all sectors closed red for the week. The Consumer Goods sector (-377bps d/d; -854bps w/w) was the biggest loser on the day, following declines in INTBREW (-966bps), NB (-454bps) and NESTLE (-289bps). The Industrial Goods sector (-349bps d/d; -10.30% w/w) followed suit and led laggards for the week, on the back of sizeable losses in DANGCEM (-708bps) and WAPCO (-230bps). Likewise, the Oil & Gas sector (-141bps d/d; -231bps w/w) closed under no thanks to losses in FO (-500bps), TOTAL (-486bps) and SEPLAT (-43bps). Finally, the Banking sector (-116bps d/d; -449bps w/w) also shed points as gains in ACCESS (+529bps) and UBA (+185bps) could not offset dips in GUARANTY (-457bps) and ETI (-256bps). 

Despite DANGCEM’s attempt to make a recovery at market close, bears held sway on the market. With no signs of losses abating, the analysts believe negative sentiment will filter into the market at week open. 

Stock Watch: 

Amidst the broader market onslaught, DANGCEM recorded its worst session since March 2017 at week close, shedding 708bps on the day. The cement giant was one of the top losers for the week, down 861bps w/w and currently trades at a year-low of N 223.00. The stock has lost 3% ytd, a fairer performance compared to a 10% ytd loss for the Industrial Goods sector index. 

Mixed sentiment prevails at week close 

The CBN conducted an OMO auction today offering N450 billion and selling N 175 billion across the 111DTM and 223DTM bills at respective stop rates of 11.05% and 12.15% (effective yields: 11.43% and 13.12%). In the secondary market, sentiment on T-bills was mixed with a negative bias, with yields rising 3bps on average. Notably, yields on the 41DTM and 181DTM bills advanced 91bps and 27bps to settle at 12.24% and 12.39% respectively. In contrast, trading in the bond market was more positive. Overall, yields dipped 2bps on average across benchmark bonds today, with buying momentum concentrated on the short to mid-dated maturities. In particular, yields on the 15.54% FGN FEB 2020 and 16.39% FGN JAN 2022 bonds dipped 18bps and 6bps to close at 12.79%, 12.54% and 13.19% respectively. Meanwhile, after a relatively mixed trading week, yields declined 25bps w/w on average across the T-bills space and 19bps on benchmark bonds. 

Amidst relatively healthy system liquidity, the analysts expect underlying mixed sentiment (with a slightly positive tilt) to persist at week open. 

Currency 

The CBN intervened in the FX market, injecting $210 million mid-week into various segments of the market. Amidst this, the naira appreciated N 0.72 and N 3.50 w/w at the I&E FX Window and in the parallel market to close at N 360.85 and N 362.00 against the dollar respectively. 

The 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.