Financial Market Update   

26 June 2018 ( Lagos )

Mixed sentiment persists in fixed income market 

The CBN conducted an OMO auction at the start of the week, offering ?250 billion and selling ?207 billion across the 87DTM and 213DTM bills at respective stop rates of 11.05% and 12.15% (effective yields: 11.35% and 13.08%). Amidst this, Interbank call rate advanced 850bps to 11.33% (previous: 2.83%). 

Meanwhile, trading in the T-bills market turned mixed with a positive tilt, with yields moderating 3bps on average. Notably, whilst yields on the 38DTM (-46bps to 12.61%) and 262DTM (-47bps to 13.34%) bills declined, yields on the 31DTM (+26bps to 12.67%) and 115DTM (+22bps to 12.93%) bills advanced. However, sentiment in the bond space remained negative, with yields on benchmark bonds advancing 11bps on average as sell pressure was weighted towards shorter tenors. 

In particular, yields on the 16.00% FGN JUN 2019, 15.54% FGN FEB 2020, and 12.40% FGN MAR 2036 bonds, advanced 71bps, 23bps and 15bps to settle at 13.21%, 13.24% and 13.95% respectively. 

Driven by weak investor sentiment, analysts expect mixed trading to persist in the T-bills market today. Meanwhile, they anticipate tepid trading in the bond space ahead of tomorrow’s bond PMA. 

DANGCEM lifts the bourse at week open 

Notwithstanding the array of red closes across key sectors, the Nigerian equity market closed the session 34bps higher, thanks to a mid-session spike in market behemoth, DANGCEM. 

The Oil & Gas (-258bps) sector was the biggest loser on the day, following a steep decline in SEPLAT (-499bps). Likewise, the Consumer Goods (-21bps) and Industrial Goods (-15bps) sectors closed under after losses in GUINNESS (-51bps), NB (-45bps), NESTLE (-33bps), CAP (-489bps) and WAPCO (-231bps) overshadowed gains in HONYFLOUR (+239bps), UNILEVER (+49bps), CCNN (+485bps) and DANGCEM (+222). 

Finally, the Banking sector dipped a meagre 5bps, as gains in GUARANTY (+86bps) and ZENITHBANK (+19bps) were offset by losses in ACCESS (-240bps), ETI (-99bps) and UBN (-85bps). 

Market breadth remained negative with 21 advances and 22 declines. 

Market Outlook 

Save for the uptick in heavyweight, DANGCEM, sentiment in the market is still largely bearish. Thus analysts foresee another negative performance by the ASI today. 

Stock Watch

FCMB has shed 9% over the last eight sessions. The stock currently trades at a price of N2.11 and has returned 43% YTD, compared to the Banking sector’s 1% YTD return. 

Corporate Disclosures 

The Board of Japaul Oil and Maritime Services Plc announced the appointment of Hon. Abdulkadir Mamman Nasir as a Non-Executive Director, Mr. Kingsley Uyokpeyi as Acting Executive Director, Operations and Mrs. Funmi Omodamori as Acting Executive Director, Finance & Planning. 

The Board of Directors of Livestock Feeds Plc. announced that the 2018 Annual General Meeting of the Company earlier scheduled to hold on Thursday 31 May 2018 will now be held on Monday 23 July 2018. 

Transnational Corporation of Nigeria announced the appointment of Mrs. Owen Omogiafo as an Executive Director of the Company with effect from July 1, 2018. 

Corporate Earnings

PeriodRevenue (?'million)y/y changePAT (?'million)y/y change CHELLARAMQ1’188,733-30%201-40%

Source: Analysts from Vetiva Capital Management Limited.

Reporting for EasyKobo on Tuesday, 26 June 2018 in Lagos, Nigeria

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