Bond offer circular release to spur market activity 

19 September 2018 :With the Central Bank once again refraining from mopping up liquidity, Interbank call rate declined 233bps to settle at 9.50% and liquidity hovered at N253 billion. 

• Amid strong investor interest in T-bills, yields yields moderated 31bps on average. Specifically, yields on the 30DTM and 149DTM bills declined 102bps and 156bps to settle at 11.19% and 12.76% respectively. The bond market was traded more mixed with yields advancing slightly. Notably, whilst yields on the 14.50% FGN JUL 2021 and 14.20% FGN MAR 2024 bonds advanced 14bps and 13bps to close at 15.30% and 15.18% respectively, yield on the 16.00% FGN JUN 2019 bond declined 14bps to settle at 14.68%. 

• The Debt Management Office released the September Bond Offer Circular, showing an offer of N90 billion, in line with market expectation and August offer (eventual sale: N40 billion). Given this, analysts expect improved certainty in the market to spur more buying as liquidity remains relatively healthy. 

Equity market rebounds as Banking stocks surge 

• The Nigerian bourse recovered from the negative start to the week to close 56bps higher. While all key sectors closed in the green, trading was supported by strong buying interest in the Banking sector. 

• Notably, recoveries in large-caps UBA (+278bps) and ZENITHBANK (+247bps) supported a 126bps rise in the Banking sector. Meanwhile the Oil & Gas (+32bps) and Consumer Goods (+27bps) sectors recorded marginal gains thanks to upticks in FO (+526bps), ETERNA (+331bps) and NESTLE (+226bps). The Industrial Goods sector inched up slightly with a 2bps gain, following a rise in CUTIX (+250bps). 

Market breadth turned positive with 28 advances and 17 declines. 

Market Outlook 

Despite the modest improvement in trading patterns, investor sentiment on the exchange remains tepid and as such analysts foresee a mixed trading session at mid-week. 

Stock Watch: After posting heavy losses last week, FBNH has rebounded from a year-low of N8.00 (reached last Friday), gaining 671bps in yesterday’s session to settle at N8.75. The stock is currently trading at a ytd loss of 0.57% and is one of the best performing banking stocks. 

Reporting for EasyKobo on Wednesday , 19 September 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited