Bills and Equity- what happened last week ?   

Market continues losing streak to start the new month 

10 September 2018 : The market closed out the week in the red, shedding 21bps to take the ASI to a ytd loss of 11%. Market breadth was broadly negative throughout the week but narrowed in the last session. Nonetheless, losses persisted across heavyweights in the Banking (d/d: -62bps; w/w:-235bps) and Industrial Goods (d/d:-44bps; w/w:-186bps) sectors. Major culprits here were DANGCEM (-219bps w/w), WAPCO (-213bps w/w), GUARANTY (-278bps w/w) and ACCESS (-474bps w/w). Meanwhile, the Oil and Gas sector (d/d: -18bps) had a quiet session on Friday, but was the worst performer for the week (w/w: -368bps) following a significant decline in SEPLAT (w/w: -723bps). Though posting a mild recovery to close the week, the Consumer Goods sector lost 275bps w/w as a result of poor showings from NB (w/w: -511bps), PZ (w/w: -10.00%) and GUINNESS (w/w: -737bps) through the week. 

Though analysts expect stronger bargain hunting at the start of the week, underlying investor apathy for Nigerian stocks is expected to drive most trading sessions into negative territory in the coming week. 

Stock Watch: WAPCO hit a nine-year low of N23.00 today. The stock has lost 48% of its value ytd and is significantly underperforming the Industrial Goods sector (ytd: -17%). 

FI market closes bearish after multiple OMO auctions 

Amid an aggregate maturity of N295 billion, the CBN mopped up N499 billion across three OMO auctions during the week. That said, system liquidity remained buoyant at c.N349 billion and the interbank call rate moderated 17bps to 2.83% at week close. 

The fixed income market traded bearish on Friday as investors reacted to higher stop rates at Thursday’s OMO auction. Yields in the T-bills space advanced 73bps (+6bps w/w) with notable advances on the 34DTM (+156bps to 12.34%) and 62DTM (+167bps to 12.41%) bills. Likewise, bond yields rose rose 17bps d/d and 26bps w/w. Sell pressure was concentrated on the mid-dated maturities as yields on the 14.50% FGN JUL 2021 and 16.39% FGN JAN 2022 bonds rose 38bps and 88bps to settle at 15.36% and 15.08% respectively. 

Analysts anticipate a bearish start to next week’s trading given the strong sell sentiment in the fixed income market at week close. 

The CBN continued its intervention in the Foreign Currency market this week, injecting $210 million at the inter-bank foreign exchange on Tuesday. Amid this the naira depreciated N0.14 w/w at the I&E FX Window to settle at N362.78 against the dollar while depreciating N0.50 to N359.50 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 Stanbic IBTC Holdings Plc has notified the Nigerian Stock Exchange that Stanbic IBTC Ventures Limited (“SIVL”), a subsidiary of Stanbic IBTC Holdings PLC has applied to the Securities and Exchange Commission (the “Commission”) to surrender its licence as a Venture Capital Manager. This surrender is entirely voluntary and the Commission has granted a “No Objection” to SIVL’s application. 

Reporting for EasyKobo on Monday , 10 September 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited

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