Mop up expected to counter impact of N452 billion inflow 

09 August 2018 ( Lagos): In spite of healthy system liquidity (N234 billion) and and a continued halt in Open Market Operations, the Interbank Call rate advanced 17bps to 7.75%. 

Meanwhile, the healthy system liquidity supported demand in the T-bills market, with yields declining 10bps on average. Notably, yields on the 36DTM (-100bps to 10.71%) and 218DTM (-30bps to 12.90%) bills dipped yesterday. However, trading in the bond space stayed mixed, with sell pressure heavier on the longer-dated tenors, even as yields on benchmark bonds closed flat on average yet again. Of note were the 16.00% FGN JUN 2019 bond which moderated 12bps to settle at 12.61% and the 12.1493% FGN JUL 2034 bond which advanced 10bps to settle at 14.30%. 

Ahead of the N452 billion OMO inflow today, analysts expect the CBN to conduct an OMO auction. Thus, analysts expect yields to reverse direction in the T-bills space. Meanwhile, amidst fresh supply from off-shore investors, analysts expect sentiment in the Bond space to remain mixed, albeit with a bearish tilt today. 

Apathy sets in as bourse continues to slide 

The NSE ASI remained in negative territory at mid-week, down 9bps amidst sustained investor apathy across all sectors. Notably, value traded fell to its lowest in 15 months at N730 million (30-Day Avg: N3.3 billion). 

The Oil & Gas sector was once again the largest loser, down 96bps on the day following declines in OANDO (-439bps) and TOTAL (-256bps). The Banking (-24bps) sector also remained in the red as losses in UBA (-104bps) and GUARANTY (-38bps) outweighed gains in FIDELITY (+272bps). Meanwhile, the Consumer (-7bps) and Industrial Goods (- 3bps) sectors drew to a tepid close amidst mixed movements across small-mid cap stocks; CHAMPION (-305bps), HONYFLOUR (-173bps), CUTIX (-588bps), and DANGFLOUR (+122bps), CADBURY (+50bps), CCNN (+842bps). 

Market breadth remained positive with 19 advances and 18 declines. 

Market Outlook 

Market sentiment remains downbeat with significantly weak trading activity levels and muted movement across large caps, as such, analysts foresee another tepid trading session given no discernible signs of improvement. 

Stock Watch: GUARANTY released its H1’18 results yesterday. The company showed a 6% y/y increase in revenues and a 15% increase in PAT y/y. The stock currently trades at N39.00 and has seen a ytd loss of 4.29%. 

Corporate Disclosure 

The Board of Directors of Seplat Petroleum Development Company Plc has notified the Nigerian Stock Exchange of the purchase of 900,000 ordinary shares by the wife of Dr. A.B.C. Orjiako, chairman of the company. The announcement was made in accordance with rule 12 of the amentdments to the listing rules of the Nigerian Stock Exchange. 

The Board of Directors of eTrantact International Plc has announced the appointment of Mr. Paul Obanua, Mr. Judedavid Ogochukwu Mbamalu, Mr. Olayinka Oluwatimehin as non-executive directors and Mr. Olaniyi Toluwalope as executive director. The board also announced the resignation of Mr. Bayo Adeyemo as non-executive director. 

Reporting for EasyKobo on Thursday ,09 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited