Bourse slides mildly w/w as blue chips suffer
06 August 2018 ( Lagos ): The ASI drew to a -52bps close for the day and a -37bps w/w close as losses were observed in the blue chip stocks once again. The Banking and Consumer Goods sectors were the major drivers of the negative activity. The Banking sector (d/d: -90bps; w/w: +83bps) was the biggest loser, but managed positive gains w/w, as negative closes in ETI (+58bps) and UBA (-457bps) dragged the sector. The Consumer Goods sector was also on the losing side as declines in DANGSUGAR (-274bps) and INTBREW (-161bps) pulled the index 39bps lower d/d and 101bps lower w/w. Meanwhile, the Industrial Goods (d/d: +50bps, w/w: -53bps) and Oil and Gas (d/d: +19bps; w/w: +676bps) sectors both closed higher thanks to gains in BETAGLAS (+10.00%), WAPCO (+72bps), SEPLAT (+85bps) and ETERNA (+83bps).
With large-cap stocks constantly under pressure throughout the week, and a slowdown in earnings releases, analysts foresee a tepid start to the week as market sentiment remains soft.
Stock Watch: WEMABANK has lost 10% in the last eight sessions. The stock is still outperforming other banking stocks – returning 32.69% ytd compared to the -2.89% ytd average and is the third best performing banking stock.
Yields head south for the week in FI market
Sentiment was positive at the beginning of the week amidst healthy system liquidity as both spaces of the fixed income market saw yields moderate. Trading turned mixed on Tuesday as yields remained flat on average. On Wednesday, the CBN conducted a PMA offering and selling N216 billion on the 91DTM, 182DTM and 364DTM bills at respective stop rates of 10.00%, 10.40% and 11.30%, lower than rates at the previous PMA.
On Thursday, the CBN mopped up N363 billion (offer: N600 billion) amid an OMO inflow of N324 billion, with this T-bills closed flat on average while yields on benchmark bonds moderated a meagre 4bps. Market momentum turned down beat on Friday as yields advanced both on T-bills and benchmark bonds. Overall, yields in the T-bills market declined 13bps on average through the week. Similarly, though milder, buying was evident on the bonds space as yields on benchmark bonds shed 5bps on average w/w.
Amidst tightened system liquidity analysts expect mixed sentiment to persist in the fixed income space at the beginning of next week, analysts however cannot rule out the potential of bargain hunting on bonds next week.
The CBN continued its regular interventions in the currency market this past week, through a spate of spot and forward currency sales. Notably, the apex bank sold $210 million on Thursday, across various dollar windows in the market. Meanwhile, the naira depreciated N0.39 w/w at the I&E FX Window to settle at N362.67 against the dollar while remaining stable throughout the week at N358.50 in the parallel market. The apex bank also sold $340 million on retail Secondary Market Intervention sales for the Yuan this week.
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
The Board of Directors of Premier Paints Plc has announced the filing of its Q2’18 accounts with the Nigerian Stock Exchange. The accounts were filed on Tuesday 31 July 2018.
The Board of Directors of Staco Insurance Plc has notified the Nigerian Stock Exchange that the company has been unable to file its unaudited financial statements for the period ended 3- June 2018 within the period prescribed by The Exchange’s rules due to the fact that the results are being reviewed by the National Insurance Commission (NAICOM) for approval. The company is unable to provide specific timelines as to when it will be able to file the outstanding returns.
Reporting for EasyKobo on Monday ,06 August 2018 in Lagos, Nigeria
Source: Vetiva Capital Management Limited