Second OMO auction fails to dampen T-bills market 

06 August 2018 : The CBN conducted another OMO auction yesterday, where they offeredN400 billion and soldN138 billion on the 64DTM, 127DTM and 190DTM bills at stop rates of 10.00%, 11.50% and 12.15% (effective yields 10.18%, 11.9793% and 12.9703%) respectively. Amid this, Interbank Call rate inched up by 9bps to 3.17%, as system liquidity remained buoyant at c.N476 billion. 

Trading remained bullish in the T-bills space, with yields declining 46bps on average. Notably, yields on the 22DTM and 85DTM bills declined 500bps and 207bps respectively to settle at 6.50% and 9.97%. Meanwhile, the bond space turned bullish, with yields declining 5bps across benchmark bonds. Buying was observed on the short-dated tenors, where yield notably declined 27bps on the 15.54% FGN FEB 2020 to settle at 14.29%. 

Analysts expect the CBN to conduct another auction today to mop up theN295 billion maturing today. Following this, analysts anticipate a quiet trading day in the T-bills space. Meanwhile, analysts anticipate a mixed session in the bond space,with activity focused on the shorter-end of the curve. 

NSE ASI slumps as key sectors shed points 

The NSE ASI closed lower yesterday following a spate of late activity in the Banking and Industrial Goods sectors. The market shed 149bps on the back of losses in large-caps in both sectors. 

Notably, the Banking and Industrial Goods sectors performed poorly, shedding 120bps and 230bps respectively as sell-offs in heavyweights ETI (-225bps), ZENITHBANK (-205bps), GUARANTY (-108bps), WAPCO (-191bps) and DANGCEM (-304bps) dragged the sectors. The Oil and Gas sector was the worst performer, falling 321bps following sharp selloffs in SEPLAT (-723bps). Meanwhile, the Consumer Goods (+25bps) sector was the only gainer thanks to upticks in NB (+54bps) and INTBREW (+313bps). 

Market breadth turned negative with 19 advances and 27 declines. 

Market Outlook 

Despite mixed trading through most of the session, large-caps once again swayed the market late in the session. As such, analysts foresee another mixed session today amidst sustained tepid sentiment. 

Stock Watch: SEPLAT hit a year-low ofN603.00 yesterday. The stock has lost 3.71% ytd and is trailing its consensus target price by 39% (TP:N984.13). 

Corporate Disclosures

The Board of Directors of Universal Insurance Plc has informed shareholders and stakeholders that the board has selected 14 Novembe 2018 as the date of the company’s annual general meeting. The company shall also conduct its business within Tier 2 in the new capitalization policy released by the National Insurance Commission (NAICOM). 

The Board of Direcors of Tripple Gee and Company Plc has notified the shareholders and the general public that the 28th annual general meeting of the company will be held on 13 September 2018. 

Reporting for EasyKobo on Thursday , 06 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited