Equity

Industrials sell-off caps negative trading week 

13 August 2018 : The market drew to a -217bps close for the day and a -289bps w/w close as negative sentiment continued to hamper the market, with all key sectors closing lower w/w. The Industrial Goods sector (d/d: -539bps; w/w: -442bps) was the biggest loser at week close, as sharp declines in DANGCEM (-614bps) and WAPCO (-635bps) dragged the sector and the ASI. The Banking (d/d:-75bps; w/w: -135bps) and Consumer Goods (d/d: -5bps; w/w: -33bps) sectors also closed in the red following losses in ETI (-497bps), UNITYBNK (-638bps), FLOURMILL (-353bps) and DANGSUGAR (-250bps). The Oil and Gas sector was the sole sector in the green on Friday, shaking off prior losses to gain 46bps thanks to upticks in MOBIL(+353bps) and FO (+22bps). 

Whilst the notable dip in stock prices this week creates an opportunity for bargain hunters, analysts believe investor apathy, amidst unfavourable political developments, will remain a dampener in the coming week. 

Stock Watch: DANGCEM is currently down 7% ytd trading atN214.00, its lowest price since October 2017. The stock lost 614bps at week close, its largest daily loss in two months. 

Fixed Income

Yields climb in the fixed income market 

Trading persisted negative in the T-bills space at week close, as liquidity remained tight following theN377 billion liquidity mop up in the previous session. Yields rose 7bps on average across this space, as yields on the 13DTM and 342DTM bills advanced 59bps and 23bps to settle at 11.02% and 12.86% respectively. Likewise, strong sell pressure was evident in the bond space with yields on benchmark bonds advancing 19bps on average. Notably, yields on the 15.54% FGN FEB 2020 and 16.2884% FGN MAR 2027 bonds rose 104bps and 29bps to settle at 13.96% and 14.50% respectively. At the end of a rather tepid week, yields had risen 19bps w/w and 23bps w/w respectively across T-bills and benchmark bonds. 

With sell pressure still evident in the bond space at week close, analysts anticipate further negative trading at the start of the week. However, analysts expect demand on T-bills to be supported by aN47 billion coupon payment on the 15.54% FGN FEB 2020 bond. 

The CBN intervened in the currency market this week by injecting FX into the system. The apex bank sold $210 million on Thursday, across various dollar windows in the market. Meanwhile, the naira appreciatedN0.67 w/w at the I&E FX Window to settle atN362.00 against the dollar while depreciatingN0.50 w/w to settle atN359.00 in the parallel market. The apex bank also sold $340 million worth of yuan in retail Secondary Market Intervention sales 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 PZ Cussons Nigeria Plc has informed the Nigerian Stock Exchange that the board of directors of the company held its meeting on Wednesday 8 August 2018 where the closed period for the company’s shares was extended for the finalization of taxation figures in the draft audited financial statements of the company for the year ended 31 May 2018. The company will publish the said accounts within the stipulated 90 days period from its year end. 

The Board of Directors of Guaranty Trust Bank Plc has notified the Nigerian Stock Exchange that the board has approved the appointment of Mrs Miriam Chidiebele Olasanya as an Executive Director of the bank.

Reporting for EasyKobo on Monday ,13 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited