Trading remains tepid as weak demand persists 

23 August 2018 : The Interbank call rate advanced 150bps to 8.33%, but despite this, trading in the T-bills space was slightly positive as yields declined 6bps on average. Buying was concentrated on the short-mid end of the space, with yields on the 150DTM and 115DTM bills moderating 31bps and 30bps to settle at 13.04% and 12.41% respectively. Meanwhile, trading in the bond space remained tepid, with selling concentrated on the long-dated maturities as yields rose 10bps on average. In particular, yield on the 16.25% FGN APR 2037 bond rose 76bps to settle at 14.93%. 

Analysts expect demand on short-dated instruments to be supported by Thursday's N514 billion OMO maturity, although buying would be capped by any liquidity mop up. Analysts anticipate tepid trading on the long end as demand remains weak. 

ASI closes down ahead of two-day break 

The market returned to negative territory at week open (ASI: -171bps) with all key sectors closing down. 

The Banking sector was the biggest loser, shedding 265bps following sizable losses across large caps – ZENITHBANK (-438bps), GUARANTY (-276bps), ETI (-261bps) and UBA (-240bps). Bears also ensured the Consumer Goods (-137bps) and Oil & Gas (-41bps) sectors closed in negative territory with losses in NB (-291bps), PZ (-712bps), OANDO (-306bps) and FO (-65bps). 

Market breadth remained negative with 11 advances and 25 declines. 

Market Outlook 

Market sentiment remains visibly negative with declines across major large caps in all key sectors and a widely negative market breadth. As such, analysts foresee another slow start to trading today. 

Stock Watch: ZENITHBANK has lost 7% in the last 5 sessions. In line with the broader market rout, the stock has closed red in seven out of eleven sessions. Currently trading at N21.85 (ytd: -15%), the stock trades below analyst's target price of N35.11. 

Corporate Disclosures

The Board of Directors of Diamond Bank Plc has announced the appointment of Mr. Idris Mohammed as a non-executive Director with the approval of the Central Bank of Nigeria. 

The Board of Direcors of Nigerian Aviation Handling Company Plc has announced the appointment of Mrs. Olatokunbo A. Fagbemi as a Non-Executive Director of the company effective from 15 August 2018. 

Reporting for EasyKobo on Thursday ,23 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited