Buying persists despite T-bills PMA 

30 August 2018 :The CBN conducted a T-bills PMA where it offered and sold N207 billion across the 91, 182 and 364DTM bills. Amid this, liquidity fell to N159 billion and the Interbank call rate advanced 66bps to settle at 10.58%. 

Buying persisted in the T-bills space as yields declined 6bps on average. Demand was spread across the space as yields on the 92DTM and 323DTM bills moderated 80bps and 70bps to settle at 10.35% and 12.52% respectively. The bond market traded more mixed, with buying at the short-mind end accompanied by sell-offs on longer-dated instruments. Notably, whilst yield on the 14.50% FGN JUL 2021 yield declined 19bps to settle at 14.27%, yields on the 16.2884% FGN MAR 2027 and 12.49% FGN MAY 2029 bonds advanced 7bps and 5bps to settle at 14.92% and 14.90% respectively. 

Analysts expect yields in the secondary market to converge higher to PMA rates, with the CBN likely to mop up amid a N315 billion maturity. Meanwhile, analysts foresee further tepid trading in the bond space as investors focus on shorter-dated instruments. 

Industrial Goods bears tip market to red close 

Weighed largely by losses in the Industrial Goods sector, the Nigerian equity market lost 44bps yesterday, the second negative close of the week. 

Losses were loftier across the Industrial Goods sector, with the index dipping 190bps as a result of declines in WAPCO (-556bps) and DANGCEM (-43bps). Albeit milder, the Consumer Goods sector (-5bps) also closed lower, after gains in PZ (+714bps) and DANGSUGAR (+258bps) were outweighed by losses in FLOURMILL (-706bps) and HONYFLOUR (-184bps). Meanwhile, the Banking and Oil and Gas sectors closed higher, climbing 18bps and 52bps respectively after advances in ETI (+389bps), OANDO (+385bps) and GUARANTY (+13bps) wiped off losses in ZENITHBANK (-90bps), FO (-269bps) and UBA (-359bps). 

Market breadth turned negative with 18 advances and 29 declines. 

Market Outlook 

Analysts expect trading sentiment to remain mixed, driven by a confluence of bargain hunting and profit seeking – in line with recent pattern – albeit with a positive tilt today. 

Stock Watch: Following the 556bps loss yesterday, WAPCO now trades at N25.50, a 2018-low and a 43% drop from its year-high of N56.90 – achieved in January. Analysts believe that the sell-offs have been driven by WAPCO’s weak performances in recent quarters and thus, do not expect a reprieve for the cement major until the fundamental issues are resolved. The stock has lost 9% in the last 9 sessions and trades below consensus target price of N35.61. 

Corporate Disclosures 

The Board of Directors of Seplat Petroleum Development Company Plc has announced the listing of $350 million 9.25% senior notes due 2023 on the International Securities Market of the London Stock Exchange on 29 August 2018. The notes were issued on 21 March 2018 and listed on the Euro MTF market of the Luxembourg Stock Exchange. 

The Board of Direcors of Academy Press Plc has informed stakeholders that the company will be holding its 54th Annual General Meeting at the registered office of the company on Thursday, 27 September. 

The Board of Directors of Morison Industries Plc has informe the Nigerian Stock Exchange, shareholders and the general public that Senator Muhammed A Muhammed (OFR, Professor Dew Tuan Wieh Mayson, Mr Godwiin O. Oteri, and Mr. Tayo Odeyemi have resigned from the Board of Morison Industries Plc with effect from 17 July 2018. 

Reporting for EasyKobo on Thursday ,30 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited