Fixed income market opens week to mixed trading 

25 September 2018 : Despite system liquidity of N497 billion, the Interbank call rate advanced 433bps to 8.33%. 

• Trading in the fixed income market was mixed yesterday as yields trended in opposite directions – albeit with a positive tilt overall. Yields declined 14bps on average across T-bills, with buying most prevalent on the longer-dated bills as yields on the the 101DTM and 311DTM bills moderated 70bps and 51bps to settle at 12.45% and 14.73% respectively. Meanwhile, sell pressure was weighted towards the shorter-dated bills as yield on the 38DTM bill advanced 21bps to settle at 13.37%. A similar trend was observed in the bond space as yields on benchmark bonds moderated 1bp on average. Most advances were on the short end – the 14.50% FGN JUL 2021 bond advanced 11bps to close at 15.14%, whilst yield declines were observed at the long end of the curve – yield on the 12.1493% FGN JUL 2034 bond declined 10bps to close at 15.40%. 

• Analysts expect mixed trading to persist in today’s session as investors continue to tread cautiously ahead of the Monetary Policy Committee meeting to be concluded today. Analysts expect the CBN to maintain all policy levers at the meeting. 

Market recovery short-lived as ASI turns negative 

• Despite the green close on Friday, market activity turned negative at the start of the week with the ASI shedding 27bps. Whilst buying interest persisted on banking stocks, three other key sectors closed lower. 

• Starting from the worst performers, the Oil and Gas and Industrial Goods sectors lost 76bps and 74bps respectively after lossed in FO (- 674bps), OANDO (-294bps) and WAPCO (-213bps) dragged the sectors. Meanwhile, the Consumer Goods (-57bps) sector reversed to negative territory following losses in beer stocks – INTBREW (-145bps), GUINNESS (-210bps) and NB (-323bps). The Banking sector was the sole gainer at week open, driven by continued interest in ACCESS(+123bps), GUARANTY(+159bps) and UBA(+125bps). 

Market breadth turned negative with 13 advances and 25 declines. 

Market Outlook 

With bargain hunters seemingly losing steam by week open, analysts foresee tepid trading with a negative bias in today’s session as bears maintain the upper hand. 

Stock Watch: DANGFLOUR shed 338bps to reach a year-low of N7.50 yesterday, its lowest price since October 2017. The stock has lost 41% of its value this year and is currently trailing Consensus target price of N12.77. 

Corporate Disclosures 

The Board of Directors of Law Union & Rock Insurance Plc has informed the Nigerian Stock Exchange of the appointment of Mr. Oeter Imona as the Head, Enterprise Risk Management of the company. 

The Board of Directors of Law Union & Rock Insurance Plc has notified the Nigerian Stock Exchange of the exit of Mr Eoanwan Ndiyo-Aiyetan as the Head, Human Capital Management of the company. 

The Board of Directors of Stanbic IBTC Holdings Plc has informed the public that the bank will not be debited for $2.6 billion following a review of the decision by the CBN. 

Reporting for EasyKobo on Tuesday , 25 September 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited