14 June 2018 ( Lagos ) : Negative trading persisted at week close as the ASI ended the day in the red (-26bps) albeit closing the week 67bps higher on the back of earlier gains. The Industrial Goods sector (+11bps d/d; -12bps w/w) was the sole bright spot on the day, buoyed by gains in WAPCO (+26bps). Meanwhile, the Consumer Goods sector (-98bps d/d; -85bps w/w) was the day’s biggest loser, as losses in NB (-435bps) and INTBREW (- 108bps) overshadowed gains in DANGSUGAR (+211bps). 

Likewise, the Oil & Gas sector (-93bps d/d; +384bps w/w) closed the day in the red, but was the week’s top gainer, with dips in SEPLAT (-183bps) and FO (- 14bps) outweighing a 500bps gain in ETERNA. Lastly, the Banking sector (-28bps d/d; +26bps w/w) also closed under, after ZENITHBANK (- 131bps) and ACCESS (-47bps) shed points. 

Trading was mixed this week as profit-taking at week close followed relatively strong gains earlier in the week. Analysts foresee bargain hunting at week open as investors swoop on slightly beaten down stocks.

Stock Watch

Dubai based Abraaj Group, recently filed for liquidation due to financial strains. The Private Equity firm recently invested in CILEASING, CUSTODIAN and CWG. The stocks have returned 34%, 35% and 0% YTD respectively. 

OMO maturity supports healthy buying at week close 

The CBN refrained from conducting an OMO auction today despite a ?244 billion OMO maturity, and this spurred buying in the T-bills space with yields declining 12bps on average. Notably, yields on the 21DTM and 182DTM bills declined 95bps and 81bps to settle at 11.99% and 11.83% respectively. However, trading in the bond space was more quiet with demand weighted on the shorter-dated bonds. In particular, yield on the 16.00% FGN JUN 2019 bond declined 13bps to settle at 11.91%. Overall, the fixed income market was relatively bullish, with yields on T-bills and benchmark bonds moderating 26bps and 7bps w/w on average, respectively.

Analysts expect today’s liquidity inflows to support some buying at the start of next week, barring any liquidity mop up by the CBN.

The CBN intervened in the FX market, injecting $210 million mid-week into multiple segments of the market. Amidst this, the Naira depreciated ?0.16 w/w at the I&E FX Window to close at ?361.07 against the dollar and remained flat w/w in the parallel market at ?361.00.

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

African Alliance Insurance Plc. announced the resignation of Hon. Ambassador Nurain Abayomi Mumuni from the Board of Directors of the Company effective from 15th May, 2018.

Cement Company of Northern Nigeria Plc. announced that a Final Dividend of N1.25 per N0.50 ordinary share, subject to appropriate withholding tax and approval will be paid to shareholders whose names appear in the Register of Members as at the close of business on June 14th, 2018.

Red Star Express Plc announced that the meeting of its Board of Directors earlier scheduled for Thursday June 21, 2018 at 11.00am has been rescheduled for Tuesday June 26, 2018. This is to enable the External Auditors finalize the Audited Accounts in view of the Eid-El-Fitr celebrations and attendant public holidays.

Ecobank Transnational Incorporated has mandated Deutsche Bank, Standard Bank and Standard Chartered Bank as Joint Bookrunners to arrange a series of fixed income investor meeting in the UK and US commencing on 18 June 2018. Subject to market conditions, a Rule 144A/RegS 5-year USD denominated senior unsecured bond offering will follow. The proceeds from the offering will be used for general corporate purposes which may include the refinancing of debt. 

Source: Vetiva Capital Management