Mixed trading persists at week open 

07 August 2018 ( Lagos ) : Despite the absence of the an OMO auction and relatively healthy liquidity (N337 billion), the interbank call rate advanced 359bps to 7.92%. 

Trading in the T-bills market persisted mixed at week open, with yields across maturities relatively unchanged on average. Specifically, whilst yields on the 10DTM (-29bps to 11.06%) and 101DTM (-35bps to 10.99%) bills moderated, yields on the 38DTM (+32bps to 11.82%) and 143DTM (+12bps to 12.65%) bills advanced. Likewise, sentiment in the bond space was varied, as yields closed flat on average across benchmark bonds. Of note were the 14.50% FGN JUL 2021 bond, which advanced 4bps to settle at 13.72%, and the 16.39% FGN JAN 2022 bond which declined 3bps to 13.75%. 

Analysts expect healthy system liquidity to drive stronger buying in the T-bills space in the coming session, barring a liquidity mop-up by the CBN. Meanwhile, analysts expect another quiet session in the Bonds space, in the absence of a significant market catalyst. 

Market closes marginally lower despite Industrial boost 

Despite green closes across three of the four key sectors, the NSE ASI closed marginally lower (-6bps) following a late drop in the Consumer Goods sector. 

The Industrial Goods sector rose by 200bps thanks to a boost from WAPCO (+893bps) which countered losses in CCNN (-793bps), and DANGCEM (-44bps). The Banking (+86bps) and Oil and Gas (+42bps) sectors also closed in the green thanks to gains in ETI (+427bps), UBA (+265bps), OANDO (+268bps) and FO (+64bps). Finally, The Consumer Goods sector was the sole loser on the day no thanks to NB (-204bps) and FLOURMILL (-889bps). 

Market breadth turned negative with 22 advances and 26 declines. 

Market Outlook 

Analysts foresee another day of mixed trading with a negative tilt amidst sustained tepid market sentiment, evidenced by the low value traded and negative market breadth. 

Stock Watch: ZENITHBANK released its H1’18 results yesterday showing a 15% y/y decline in revenue. The company however posted a 9% gain in PAT, 6% below Vetiva estimates, and also declared a N0.30/share. The stock has recorded a 6.59% decline ytd and currently trades at N23.95. 

Corporate Disclosure 

The Board of Directors of Universal Insurance Plc has informed stakeholders that the company has filed its half year unaudited financial statements for the period ended 30 June 2018 with the Nigerian Stock Exchange on Wednesday 02 August 2018. 

The Board of Directors of Zenith Bank Plc has informed shareholders of the company’s plan to issue interim dividends of N0.30 per share, subject to appropriate withholding tax. 

Reporting for EasyKobo on Tuesday ,07 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited