Mixed trading sentiment permeates fixed income market 

28 September 2018 : Following a N261 billion OMO maturity, system liquidity rose to c.N378 billion. Consequently, the Interbank call rate declined from 16.67% to 5.00%. 

• Meanwhile, trading stayed mixed in the T-bills market yesterday, albeit with yields advancing 5bps on average across the space. Whilst the 7DTM bill advanced 115bps to settle at 13.00%, the 84DTM bill declined 27bps to settle at 12.44%. In contrast, trading was positive in the bond market, with benchmark yields declining 8bps on average. Notably, yields on the 16.2499% FGN APR 2037 bond and 12.50% FGN JAN 2026 bond moderated 21bps and 14bps to close at 15.22% and 15.18% respectively. 

• Following Thursday’s liquidity injection, analysts see an increased probability of a follow-on OMO auction from the CBN at week close. That said, analysts expect trading to stay mixed across the FI market as liquidity remains relatively healthy. 

Negative activity persists, bourse slides further 

• The Nigerian equity market slid a further 61bps yesterday, with three of the four key sectors closing in the red. Market activity also remained weak, with turnover coming in at N2.7 billion, as tepid sentiment persisted. 

• The biggest losers on the day and accounting for a majority of turnover were the Banking (-101bps) and Consumer Goods (-150bps) sectors, as GUARANTY (-213bps), ACCESS (-61bps), UBA (-60bps), PZ (-481bps) and NESTLE (-418bps) all shed points. Also, the Industrial Goods sector moderated 8bps in a quiet session where CCNN (-213bps) was the only mover. Meanwhile, the Oil and Gas sector closed 10bps up thanks to gains in TOTAL (+105bps) which countered losses in ETERNA (-164bps). 

Market breadth remained negative with 13 advances and 21 declines. 

Market Outlook 

Analysts note the current tepid sentiment pervading the equity market, and expect this sentiment to be carried on to week close. However, analysts highlight the favourable pricing of select investor favorites and anticipate a bit of bargain hunting to temper the current tepid mood. 

Stock Watch: UACN has gained 20% in the last 8 sessions to settle at N11.85. The stock is trailing its year-open value by 30% and has a target price of N20.86. 

Corporate Disclosures

The Board of Directors of Custodian Investment Plc has informed the Nigerian Stock Exchange of the holding of a meeting on 25 October 2018 to discuss the company’s management accounts for 9M’18. 

The Board of Directors of Julius Berger Nigeria Plc has notified the Nigerian Stock Exchange of the exit of Engr Wolfgang Goetsch as the Managing Director of the company and the entry of Dr. Lars Richter as his replacement. Also a new Directorate, Corporate Development will be established to be headed by Mr Tobias Meletchus. 

Reporting for EasyKobo on Friday , 28 September 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited