Yields stay the same at OMO auction, unchanged since May 

03 August 2018 ( Lagos ) : Following a liquidity inflow of N324 billion, the CBN conducted its first OMO auction this week, offering N600 billion and selling N363 billion across the 91DTM and 203DTM bills at respective stop rates of 11.05% and 12.15% (effective yields: 11.36% and 13.03%). Amidst this, the interbank call rate advanced 41bps to 3.33%. 

Meanwhile, trading was mixed across the T-bills market, with yields closing relatively flat vs previous session. Notably, whilst yields on the 28DTM (-65bps to 10.10%) and 350DTM (-44bps to 11.97%) bills moderated, yields on the 91DTM (+73bps to 11.49%) and 182DTM (+45bps to 12.44%) bills advanced. Trading in the bond space was similarly mixed, albeit with buy pressure on the mid-dated tenors. Consequently, yields fell 4bps on average across benchmark bonds. Specifically, whilst yield on the 15.54% FGN FEB 2020 bond declined 8bps to 13.26%, yield on the 16.39% FGN JAN 2022 bond advanced 6bps to 13.73%. 

In the absence of a liquidity mop-up and any significant market catalysts, analysts expect a quiet trading day in the fixed income market today as the week comes to a close. 

Banking bulls inspire market recovery 

Leading the charge on a mid-session recovery, the Banking sector inspired the Nigerian equity market to a positive close (+21bps) yesterday. Meanwhile, NOTORE, an indigenous fertilizer manufacturing and trading company was listed on the exchange by way of introduction, at a price of ?62.50. 

As earlier stated, the Banking sector (+239bps) was the sole gainer, buoyed by sizable gains across sector heavyweights – ZENITHBANK (+260bps), GUARANTY (+38bps) and UBA (+591bps). On the other hand, the Consumer Goods sector (-103bps) was the biggest loser, dragged by losses across NB (-291bps) and INTBREW (-719bps). The Industrial Goods (-50bps) and Oil & Gas (-29bps) sectors also closed under, as declines in DANGCEM (-43bps), WAPCO (-71bps), FO (- 82bps) and OANDO (-427bps) outweighed gains in CCNN (+199bps) and TOTAL (+263bps). 

Market breadth turned positive with 24 advances and 16 declines. 

Market Outlook 

In spite of the green close, analysts note that trading pattern was mixed – indicated by the intraday chart. Barring any major earnings announcement, analysts expect trading patterns to remain mixed today. 

Stock Watch: ETI has gained 10% in the last 5 sessions. The stock is currently trading at a year high price of N 21.95 and has returned 29.12% ytd. 

Corporate Disclosure 

The Board of Directors of Veritas Kapital Assurance Plc has notified the stakeholders that the suspension of trading on their stock on 05 July, 2018 was as a result of the delay in filing the 2018 audited financial statements with the exchange at the due date.Due to the delay in filing the 2017 audited financial statement, the company is unable to file its Unaudited financial statements for the period ended 31 March and 30 June 2018. 

The Board of Directors of Cement Company of Northern Nigeria Plc has notified the Nigerian Stock Exchange and stakeholders that at the annual general meeting of the company, the directors made appointments to the board for casual vacancy. The members elected to the board are Alhaji Shehu Abubakar, Senator Khairat Abdulrazaq Gwadabe and ALhaji Abbas Ahmad Gandi. 

Reporting for EasyKobo on Friday ,03 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited