Equity: Market rallies at week close as Industrials recover
20 August 2018 : After posting ten straight negative closes, the ASI recorded a 187bps rebound at week close following a strong recovery in Indsutrial Goods. This gain was however unable to offset earlier losses with the index recording a 51bps w/w loss. The rebound in the Industrial Goods sector (d/d:+351; +129bps) was solely buoyed by sizable gains in DANGCEM (+680bps). The Consumer Goods sector (d/d:+26bps; w/w -112bps) also recorded a positive session at week close thanks to DANGFLOUR (+132bps) and UNILEVER (+377bps). Meanwhile, the Banking and Oil and Gas sectors remained in the doldrums, down 19bps and 11bps respectively on Friday to close 380bps w/w and 147bps lower w/w, as sizable losses in UBA (-11.64%) and OANDO (-11.71%) dragged the sectors.
Despite the DANGCEM- driven recovery witnessed at week close, analysts foresee a return to negative territory by next week given that underlying investor apathy remains in the market. Nonetheless, analysts expect milder losses at the start of the week.
Stock Watch: UBA is one of the last Tier 1 banking institutions yet to release their H1’18 financial statements. The stock has lost for four straight sessions in the past week to settle at N8.35, a ytd loss of 19%.
Fixed Income : Weak sentiment persists as yields inch higher
Sell-offs persisted in the T-bills space at week close as yields advanced 9bps d/d and 17bps w/w – despite healthy system liqiudiity of N382 billion. The yield on the 153DTM bill saw the largest increase, rising 43bps to 13.35% today. Bearish sentiment was also prevalent in the bond space as yields on benchmark bonds advanced 15bps d/d and 46bps w/w. Today’s noteworthy movements were on the 16.39% FGN JAN 2022 and 12.40% FGN MAR 2036 bonds which advanced 60bps and 24bps to settle at 14.37% and 15.01% respectfively.
Despite healthy system liquidity, demand in the fixed income market was poor in the past week amid wider emerging market weakness. As the global and political landscape remain unchanged, analysts anticipate a tepid start to next week’s trading.
The CBN sustained its intervention in the currency market this week by injecting FX into the system. The apex bank sold $210 million on Tuesday, across the various windows in the market. Meanwhile, the naira appreciated N0.50 w/w at the I&E FX Window to settle at N362.50 against the dollar while remaining unchanged at N358.50 in the parallel market.
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 Austin Laz and Company Plc has notified the Nigerian Stock Exchange and shareholders that the company filed its unaudited financial statements for the period ended 31 March 2018 with the NSE on 8 May 2018. This was due to the exit of the Chief Finance Officer and subsequent appointment of the new CFO who required time to balance the records in line with the required standard.
The Board of Directors of CWG Plc has notified the Nigerian Stock Exchange that the board has approved the appointment of Mr Wale Agbeyangi as a Non-Executive Director, Mr Philip Obioha as Board Chairman and Mr. Adewale Adeyipo as Executive Director. The board also accepted the resignations of Mr Kunle Ayodeji and Mrs. Adedoyin Odunfa as Executive and Non-Executive Directors respectively, who’s resignations were formally accepted at the board meeting of 16 March 2018.
The Board of Directors of Beta Glass Plc has informed the Nigerian Stock Exchange of the appointment of Ms. Adebola Ayobami Adebisi as the new company secretary with effect from 5 July 2018.
The Board of Directors of CWG Plc has announced announced a strategic partnership with Entersekt to bring the company’s full suite of mobile centred security and payments enablement products to banks and other enterprises in Nigeria.
Reporting for EasyKobo on Monday ,20 August 2018 in Lagos, Nigeria
Source: Vetiva Capital Management Limited