OMO auction fails to dampen T-bills market 

05 August 2018 : The CBN conducted an OMO auction yesterday, offering N600 billion but selling N171 billion on the 72DTM and 198DTM bills at stop rates of 11.05% and 12.15% (effective yields 11.36% and 11.03%) respectively. In spite of the mop up, Interbank Call rate eased by 134bps to 3.08%, supported by c.N745 billion system liquidity. 

Also spurred by healthy system liquidity, trading remained bullish in the T-bills market, with yields declining 5bps on average. Notably, yields on the 30DTM and 93DTM bills declined 93bps and 85bps respectively to settle at 10.83% and 11.55%. On the other hand, selloffs were more prevalent in the bond market, with yields advancing 6bps on average across benchmark bonds. Short-dated tenors were the worst hit, with yield notably advancing 68bps on the 14.50% FGN JUL 2021 to settle at 14.95%. 

Analysts anticipate healthy demand in the T-bills market today, on account of buoyant system liquidty. However, analysts foresee an extension of bearish trading In the bond space as investors anticipate further rate advances. 

Market rebounds after Banking sector boost 

After a 141bps rise in the Banking Index, the Nigerian equity market closed 28bps higher, swinging wtd and mtd returns into the green. 

Drilling down to sector performances, the Banking sector was the standout performer, rising 141bps due to weighty gains on ZENITHBANK (+258bps), UBA (+190bps) and GUARANTY (+151bps). The Oil and Gas sector (+27bps) also closed in the green, supported by a 400bps rise in OANDO. On the other hand, the Consumer Goods sector shed 69bps on the back of losses in PZ (-10.00%) and NB (-211bps), whilst the Industrial Goods sector closed flat. 

Market breadth turned positive with 23 advances and 18 declines. 

Market Outlook 

With market breadth turning positive and the Banking sector seeing buy-side activity, analysts anticipate another positive session today. 

Stock Watch: NB fell below N100.00 after losing 211bps in the last session (the first time since January 2016). The stock has declined 31% since the start of the year. The stock currently trades at N93.00, 43% below its year-high of N52.68. 

Corporate Disclosures

The Board of Directors of Global Spectrum Energy Services Plc has notified the Nigerian Stock Exchange and shareholders of the death of Mr. Ibitoye Babatunde, a Non-Executive Director. 

The Board of Direcors of Sunu Assurances Nigeria Plc has notified the Nigerian Stock exchange and the general public that the National Insurance Commission has approved the appointment of Mazars Coker and Co. as External Auditors to the company. 

The Board of Directors of PZ Cussons Plc has notified shareholders that a final dividend of N0.15 per ordinary share has been declared and subject to withholding tax and approval will be paid to shareholders on Thursday 4 October. 

The Board of Directors of Nigerian Breweries Plc has announced the appointment of Mr. Emmanuel Oriakhi as the company’s Marketing Director effective 1 September 2018. 

Reporting for EasyKobo on Wednesday , 05 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited