Bills and Equity- what happened last week ?   

Shortened week ends in positive territory 

27 August 2018: The ASI posted slight gains in a shortened week, rallying 63bps today to clinch a 45bps w/w gain, the first positive w/w close in four weeks. This positive activity was led by the Industrial Goods sector (d/d: +123bps; w/w:+196bps) which was in turn boosted by DANGCEM (d/d:+217bps; +682bps w/w). The Banking sector was positive on the day (+25bps) thanks to upticks in ETI (+417bps) and ZENITHBANK (+46bps), which offset losses in GUARANTY (-79bps), but prior activity in blue-chips dragged the sector 304bps lower w/w. Meanwhile, the Consumer Goods (d/d: -43bps; w/w: -218bps) and Oil and Gas (d/d: -3bps; w/w:-23bps) sectors both closed down as ETERNA (-164bps) and DANGSUGAR (- 68bps) dragged the indices. 

Analysts note that last week’s positive close was driven by a spike in a few large cap stocks, and market sentiment was broadly weak—evidenced by negative w/w closes across three of four key sectors. Analysts anticipate a cautious start to this week’s trading. 

Stock Watch: ETERNA has lost 6% in the last seven sessions, the stock is currently trading atN6.00 and has returned 48% ytd, outperforming the Oil and Gas sector (ytd: -11%). 

Yields head southwards in FI market 

The T-bills space remained positive at week close as yields declined 2bps d/d and 12bps w/w amid buoyant liquidity ofN264 billion. Notably, yields on the 27DTM and 62DTM bills moderated 16bps and 25bps to settle at 10.28% and 11.24% respectively. Likewise, sentiment in the bond space was also positive as yields on benchmark bonds moderated 4bps d/d albeit rising by 1bp w/w. Notable buying was observed on the 16.39% FGN JAN 2022 and 14.20% FGN MAR 2024 bonds as their yields declined 12bps and 17bps to settle at 14.33% and 14.58% respectively. 

There has been notable buying on short-dated bills, buoyed by healthy system liquidity and this should persist at week open. However, a cautious market outlook on long-term yields would continue to drive cautious trading in the bond space. 

This week, the naira depreciatedN0.35 w/w at the I&E FX Window to settle atN362.50 against the dollar while remaining unchanged atN358.50 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 Universal Insurance Plc has notified the Nigerian Stock Exchange and shareholders that the company’s annual general meeting will be held on 30 August at the company’s boardroom. 

Reporting for EasyKobo on Monday ,27 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited

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