CBN conducts third auction, rates advance in FI market 

07 September 2018 :Amidst a N295 billion inflow via a T-bills maturity, the CBN conducted another OMO auction yesterday, where they offered N550 billion and sold N189 billion across the 63DTM, 126DTM and 182DTM bills at stop rates of 10.00%, 11.50% and 12.50% (effective yields 10.18%, 11.98% and 13.33%) respectively. In spite of the mop up however, Interbank Call rate further declined by 17bps to 3.00%. 

Meanwhile, trading turned tepid in the T-bills space, with yields advancing 15bps on average. Notably, sell pressure was prevalent at the short-end of the space, with yields on the 70DTM and 84DTM bills advancing 62bps and 63bps respectively to settle at 11.24% and 10.60%. Trading sentiment was also weak in the bond space, with yields advancing 2bps across benchmark bonds. Similarly, the bulk of sell-offs fell towards the short-dated tenors, with yield notably declining 34bps on the 12.098% FGN JAN 2020 bond to settle at 14.62%. 

With yields in the secondary market hovering bellow OMO rates, analysts anticipate further sell pressure in the T-bills space at week close, as yields adjust to OMO levels. Meanwhile, analysts expect bond trading to remain tepid to close out the week, with activity focused on the short-end of the curve. 

Nigerian market sell-off persists as blue-chips falter 

The Nigerian bourse drew to a red close yesterday, shedding 88bps on the back of selling concentrated on blue-chips in the Banking and Consumer Goods sectors. 

The Banking and Consumer Goods sectors were the worst performers, losing 249bps and 106bps respectively as sell-side activity in large-caps GUARANTY (-464bps), ZENITHBANK (-210bps), GUINNESS (-222bps), and NB (-53bps) weighed the sectors. On the other hand, the Industrial Goods (-38bps) and Oil & Gas (-15bps) sectors both recorded mild gains as WAPCO (+43bps), DANGCEM (+45bps), OANDO (+94bps) and FO (+500bps) lifted the sectors. 

Market breadth remained negative with 19 advances and 32 declines. 

Market Outlook 

With market sentiment deteriorating through the week, mostly negative trading yesterday and a broadly negative market breadth, analysts anticipate a negative conclusion to the week, though bargain hunting may impact closing positions. 

Stock Watch: GUARANTY has hit a year-low of N34.95. The stock has lost 14.23% ytd, shedding 8% of its value in the last thirty days and is trading 29% below analyst's target price of N51.58. 

Corporate Disclosures

The Board of Directors of Dangote Sugar Plc has informed shareholders that the board has appointed Mr. Ravindra Singh Singhvi as the Chief Operating Officer of the Company. He assumed duty on 13 August 2018. 

The Board of Direcors of Stanbic IBTC Holdings Plc has notified shareholders that those who wish to receive their interim dividend (N1.00) by way of new ordinary shares can download the Scrip Dividend Election form from their website or obtain a copy by contacting the group Company Secretary. However, shareholders who elect to receive their dividends in cash are not required to take any action. 

The Board of Direcors of Stanbic IBTC Holdings Plc has notified shareholders that, following the announcement to the NSE on 30 August 2018 in respect of the penalty of N1.886 billion imposed by the CBN. The full amount has been debited from the account of the banking subsidiary. 

Reporting for EasyKobo on Friday , 07 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited