Financial Market Update   

06 July 2018 ( Lagos)

Liquidity inflow spurs buying 

In the absence of an OMO auction and a liquidity boost from an OMO maturity of N 239 billion, Interbank Call rate declined to 4.33% (previous: 17.00%). 

Trading in the T-bills space was bullish, with yields declining 10bps on average. Notably, yields on the 21DTM (-31bps to 11.97%), 105DTM (- 66bps to 11.72%) and 168DTM (-35bps to 12.70%) bills declined. Meanwhile, tempo in the bond space was slow, with demand on short-dated bonds tempered by sell pressure on the longer dated tenors. Particularly, whilst yields on the 16.00% FGN JUN 2019 and 7.00% FGN OCT 2019 bonds moderated 7bps and 4bps to 13.08% and 13.26%, yields on the 12.40% FGN MAR 2036 and 16.2499% FGN APR 2037 bonds advanced 17bps and 7bps to settle at 14.43% and 14.33% respectively. 

Analysts expect buoyant system liquidity from the OMO maturity yesterday to support buying in the fixed income market today barring any OMO mop-ups to tighten system liquidity. 

DANGCEM lifts Nigerian Stock Exchange 

Bulls bounced back in yesterdays session notching a 65bps gain after a last minute spike in heavyweight DANGCEM. 

The Industrial Goods (+125bps) sector was the best performing sector yesterday following gains in CCNN (+474bps) and DANGCEM (+224bps). Likewise, the Banking (+25bps) and Consumer Goods (+15bps) sectors gained on the day buoyed by advances in UBN (+172bps), UBA (+49bps), GUARANTY (+12bps), DANGSUGAR (+354bps), NB (+180bps) and UNILEVER (+49bps) despite losses in FLOURMILL (-534bps) and INTBREW (-319bps). Lastly, the Oil & Gas (-94bps) sector was the only loser on the exchange yesterday with a dip in MOBIL (-789bps) wiping out a mild uptick in FO (+96bps). 

Market breadth turned positive with 25 advances and 17 declines. 

Market Outlook 

Save for the gain in DANGCEM towards the end of the session, trading in the market yesterday was relatively flat. As market begins to normalize, analysts foresee another flat session today with a positive bias as investors bargain hunt on already beaten down stocks. 

Stock Watch

CILEASING has gained 44% over the last fourteen sessions. The stock currently trades at a year-high of N 2.38 and has returned 85% YTD. Making it one of the best performing stocks on the exchange. 

Corporate Disclosures

• The Board of Directors of Flour Mills of Nigeria Plc, have announced the scheduling of its annual general meeting. The meeting will be held on Thursday 30th August 2018 at Eko Hotel and suites, Victoria Island, Lagos. 

• The Board of Directors of Royal Exchange Plc, have notified the Nigerian Stock exchange of their closed period and are reminding all insiders that they are prohibited from trading in the company’s shares from 27 February 2018 until 24 hours after the release of the audited financial statements. They also announced the scheduling of a board meeting to hold on the 25 July 2018. 

• The Board of Directors of Oando Plc have announced the holding of its annual general meeting, scheduled for Friday July 27, 2018 at Eko Hotels and Suites, Victoria Island, Lagos. Some of the points on the agenda will be the release of the year’s audited financial statements and the reports of the directors, auditors and committee. 

• The Board of Directors of Skye Bank Plc have notified the Nigerian Stock Exchange that the Central Bank of Nigeria has renewed the mandate of the bank’s board of directors for an additional two-year term until June 30, 2020. 

• The Board of Directors of Custodian Investment Plc have announced that its board of directors will be meeting on July 26, 2018. It was also announced the close of the half-year period ended June 30, 2018. 

• The Board of Directors of Unilever Nigeria Plc have announced the closure of its quarter period dated June 30, 2018. The company filed their unaudited interim financial statements for the quarter. 

Reporting for EasyKobo on Friday, 6 July 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited

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