08 June 2018 ( Lagos ) : Bears returned to the NSE at week close as the ASI closed the day under (-96bps) albeit closing in the green for the week (+503bps), supported by stronger earlier gains. It was the first positive w/w close in six weeks, with all but one sector closing in the green for the week. The Consumer Goods sector (+20bps d/d; +655bps w/w) was the sole gainer on the day, as gains in UNILEVER (+377bps) and NESTLE (+141bps) overshadowed declines in INTBREW (-413bps) and NB (-85bps). Meanwhile, the Banking sector (-161bps d/d; +448bps w/w) led laggards on friday, following dips in ZENITHBANK (-270bps) and GUARANTY (- 202bps). The Oil & Gas sector (-127bps d/d; -134bps w/w) closed in the red for the day and week after losses in ETERNA (-493bps) and SEPLAT (-324bps) beat out a gain in MOBIL (+500bps). Lastly, the Industrial Goods sector (-81bps d/d; +9.36% w/w) also closed under, after CCNN (-500bps) and DANGCEM (-142bps) shed points. 

After a week of positive trading, bears resurfaced at week close. Analysts expect profit taking observed at week close to persist at week open and thus foresee a mildly negative close on Monday.

Stock Watch

DANGSUGAR has gained 21% over the last nine sessions. The stock currently trades at ?20.00, below the analyst’s target price of ?23.30. DANGSUGAR is flat YTD, a favourable performance compared to the 6% YTD decline for the Consumer Goods sector.

Quiet trading session to round up the week

In the absence of any liquidity mop up by the CBN, trading in the T-bills space was relatively flat on friday. Notably, whilst yield on the 13DTM bill advanced 40bps to settle at 12.53%, yield on the 146DTM bill declined 69bps to settle at 12.73%. However, trading in the bond space was more bearish, with yields on benchmark bonds rising 6bps on average. In particular, yields on the 16.39% FGN JAN 2022 and 12.40% FGN MAR 2036 bonds advanced 22bps and 14bps to close at 13.62% and 13.67% respectively. Overall, t-bill yields rose 3bps w/w on average after a relatively quiet week, while yields on benchmark bonds rose 19bps w/w.

Analysts expect healthy system liquidity (?368 billion) to support some positive trading next week, barring any CBN liquidity mop up.

The CBN supported the FX market, infusing $210 million mid-week into multiple segments of the market. Amidst this, the naira depreciated ?0.06 w/w at the I&E FX Window to close at ?360.91 and appreciated ?1.00 w/w in the parallel market to close at ?361.00 against the dollar.

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.

Corporate Disclosures 

Transnational Corporation of Nigeria Plc announced that its Board of Directors has approved the appointment of Mr. Christopher Ezeafulukwe as an Executive Director of the company with effect from 1st of July, 2018.

Berger Paints Nigeria Plc., a leading manufacturer of paints and allied coatings in Nigeria, announced the resignation of its Chairman, Dr. Oladimeji Alo from the Board of Directors of the Company with effect from the 7th of June, 2018.

The Management of Chellarams Plc announced that at the board meeting held on the 7th of June, 2018, the audited accounts for the year ended 31st March, 2018 were approved by the Board and also the Board was unable to declare dividend for the year ended 31st March, 2018.

SEPLAT Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, announced that contrary to recent press speculation regarding the Assa North/Ohaji South (ANOH) project Seplat has not violated local content policy.

Okomu Oil Palm Company Plc. denied and dismissed the allegation by a local NGO called ERA/FoEN that the company had been “parading” a Rountable on Sustainable Palm Oil (RSPO) certification about. The company tasks the NGO to immediately furnish the requisite proof that the company had been doing so or face the consequences. 

Source: Analysts at Vetiva Capital Management Limited