CBN hikes one year T-bill rate at PMA 

13 September 2018 : The CBN conducted a Primary Market Auction yesterday, offering and selling N136 billion across the 91DTM, 182DTM and 364DTM bills at stop rates of 11.00%, 12.30% and 13.50% respectively (effective yields: 11.31%, 13.10% and 15.60%). Notably, rates were unchanged from the previous PMA, save for the 364DTM bill, which went up by 45bps. Amid this, the Interbank call rate advanced 200bps to 6.33%. 

 Meanwhile, bearish sentiment persisted across the secondary market, with average yields on T-bills advancing 23bps yesterday. Notably, selling was more prevalent on the shorter-dated bills, with yields on the 50DTM and 85DTM bills advancing 78bps and 85bps to settle at 13.79% and 13.90% respectively. Trading was similarly bearish in the bond market, with yields on benchmark bonds advancing 8bps on average. Particularly, the yield on the 14.50% FGN JUL 2021 bond advanced 32bps to settle at 15.36%. 

 Whilst yields in the secondary market currently hover above Wednesday’s PMA levels, analysts do not anticipate a downward adjustment to yields in the T-bills space today given that investor sentiment remains weak. Meanwhile, analysts anticipate further mixed trading in the bond space until week close. 

Nigerian bourse records heaviest daily loss in 2018 

 The Nigerian equity market recorded its largest d/d loss so far this year in yesterday’s session, after wide-spread sell-offs across the three largest sectors dragged the All-Share Index 346bps lower – its lowest level in 15 months. 

 The Industrial Goods (-391bps) sector was the heaviest loser on the day following a major tumble in heavyweight DANGCEM (-583bps). Meanwhile, the Banking (-283bps) and Consumer Goods (-157bps) sectors also shed notable points as large-caps ACCESS (-11.11%), UBA (-537bps), ETI (-513bps), NB (-455bps) and NESTLE (-40bps) were all on the losing side. The Oil & Gas (+40bps) sector was the only positive key sector thanks to gains in FO (+442bps) and SEPLAT (+61bps). 

 Market breadth remained negative with 12 advances and 37 declines. 

Market Outlook 

With deteriorating negative sentiment continuing to drive the ASI down, analysts expect further losses in the market. Analysts do not expect bargain hunting to provide sufficient support for the market given the wide-spread rout. 

 Stock Watch: Amid the broader market decline, FBNH has lost 16% in the last 11 sessions. The stock wiped out all gains recorded so far this year after shedding 8% yesterday to reach a year-low of N8.10, representing a 40% discount from analyst's target price of N13.53. 

Corporate Disclosures

 The Board of Directors of Courtville Business Solutions Plc has announced the appointment of Mr Afam Edozie as the Chairman of the Board of Directors with effect from 29 June 2018. This follows the retirement of Capt. M.O. Salami who retired from the Board. 

 The Board of Directors of Notore Chemical Industries Plc has notified the Nigerian Stock Exchange of the retirement of Mr. Femi Agbaje as the Executive Director with effect from 30 September and the appointments of Mrs Ohis Ohiwerei, Ms Ivana Osagie, Mr Bode Agagu and Dr Murtala Mohammed to various executive and non-executive roles effective 17 September. 

 The Board of Directors of Notore Chemical Industries Plc has informed the Nigerian Stock Exchange, shareholders and the general ublic that the company’s Ammonia plant was brought down for maintenance activities commencing on 14 September 2018. 

Reporting for EasyKobo on Thursday , 13 September 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited