PMA auction indicates lower stop rates 

04 October 2018 : The CBN conducted a PMA yesterday, selling N438 billion (N134 billion offered) across the 91DTM, 182DTM and 364DTM bills at respective stop rates of 10.90%, 12.098% and 13.33% – below stop rates at the previously conducted PMA and current secondary market levels. While system liquidity remained healthy at c.N477 billion, the Interbank call rate declined 58bps to 4.25%. 

Trading was across the T-bills market yesterday was mixed, with yields declining a mere 2bps on average. Notably, whilst the yield on the 162DTM bill declined 56bps to settle 13.03%, the yield on the 344DTM bill advanced 89bps to settle at 15.28%. On the other hand, the bond market saw a generally positive day albeit with some sell pressure on select maturities. Whilst the yield on the 12.1493% FGN JUL 2034 bond declined 12bps to settle at 15.09%, the yield on the 16.2499% FGN APR 2037 bond advanced 6bps to settle at 15.22%. 

Driven by healthy liquidity and lower PMA stop rates, analysts expect improved buying activity in today’s session. 

DANGCEM weighs on Nigerian bourse, ASI down 79bps 

The Nigerian bourse continued the week in negative territory, with the ASI dropping 79bps after a mid-session dip in heavyweight DANGCEM. 

Drilling down to sector performance, the Banking sector (+38bps) was the sole gainer on the day, buoyed by gains in DIAMONDBNK (+508bps), ZENITHBANK (+140bps) and GUARANTY (+55bps). Meanwhile, the Industrial Goods (-133bps) and Consumer Goods (-58bps) sectors both closed in the red as losses in DANGCEM (-239bps) and NB (-273bps) outweighed advances in CUTIX (+488bps) and DANGSUGAR (+432bps). Lastly, the Oil & Gas sector closed flat, with no price movement in the sector. 

Market breadth turned positive with 15 advances and 14 declines. 

Market Outlook 

Save for a mid session dip in DANGCEM, market sentiment was largely mixed yesterday amidst weak investor appetite. Thus, analysts foresee another tepid session today, albeit with a negative bias. 

Stock Watch: FIDELITYBK has gained 14% over the last six sessions. This comes after the bank released positive H1’18 results with top line and bottom line printing at N89 billion (+4% y/y) and N12 billion (+31% y/y) respectively. The stock currently trades at N1.85 and has declined 25% YTD. 

Corporate Disclosures

The Board of Directors of Dangote Cement Plc has informed the Nigerian Stock Exchange of the holding of a meeting on 19 October 2018 to discuss the company’s unaudited financial statements for the period ended September 30, 2018. 

The Board of Directors of Chemical and Allied Products Plc has informed the Nigerian Stock Exchange of the holding of a meeting on 19 October 2018 to discuss the company’s unaudited financial statements for the period ended September 30, 2018. 

The Board of Directors of Union Bank of Nigeria Plc has notified the Nigerian Stock Exchange of the retirement of Mrs. Oyinkansade Adewale Board Director of the company and the entry of Mr Joseph Mbulu who will succeed Mrs. Adewale as CFO. 

Reporting for EasyKobo on Thursday , 04 October 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited