Bills and Equity- what happened yesterday?   

Mixed trading across fixed income space 


17 October 2018 : System liquidity rose to N190 billion, and amid this, the interbank call rate declined from 39.92% to 24.14%. 


Trading in the fixed income market was mixed yesterday with no clear trend in yield movement. Yields across the treasury bills space were flat (up 1bp on average), with sell-offs most prevalent on the mid-dated bills. Particularly, while yield on the 128DTM bill advanced 20bps to settle at 13.35%, the yield on the 51DTM bill declined 23bps to settle at 12.91%. Trading in the bond space had a slightly negative tilt as benchmark yields advanced 1bp on average. Notably, selling was observed on shorter-dated bonds with the yield on the 14.50% FGN JUL 2021 bond advanced. On the other hand, buying was prevalent on the longer-dated maturities with yield on the 12.50% FGN JAN 2026 bond declined 5bps to settle 15.01%. 


The CBN would conduct a Primary Market Action later today, with N148 billion on offer across the 91-day, 182-day, 364-day bills. Analysts expect stop rates to be unchanged from the previous PMA given sticky secondary market yields since the previous auction. Furthermore, analysts anticipate further mixed trading in the secondary market. 


Market recovers after late DANGCEM surge 


The bourse recovered yesterday after a late surge in DANGCEM supported gains in Industrial Goods stocks to deliver a +95bps gain for the ASI. Other key sectors also closed in the green despite still mixed sentiment during the day as market turnover hit its highest point since September (N5.3 billion). 


The Consumer Goods sector (+117bps) was the big winner thanks to gains in NB (+314bps), UNILEVER (+558bps) and DANGSUGAR (+127bps). The Industrial Goods sector (+24bps) also closed higher after a rise in DANGCEM (+250bps) outweighed losses in WAPCO (-233bps) and BETAGLASS (-10%). The Banking sector inched up 13bps thanks to ZENITHBANK (+157bps), UBA (+61bps) and UBN (+101bps). Contrarily, the Oil & Gas sector (-130bps) fell sharply following a dip in SEPLAT (-159bps) and FO (+22bps). 


Market breadth remained negative with 16 advances and 23 declines. 


Market Outlook 


Despite the sudden surge in market activity, underlying investor sentiment shows little sign of a broad market improvement. As such, analysts expect a more subdued session today, albeit with a positive bias. 


Stock Watch: FCMB shed 432bps in yesterday’s session to reach a year-low of N1.55. The stock has been on a four session losing streak, shedding 8% of its value in that time. After rising as high as 144% earlier in the year, the stock has returned +5% year-to-date. 


Corporate Disclosures


The Board of Directors of Kapital Assurance Plc has notified the Nigerian Stock Exchange and interested parties that the board will be meeting on 25 October 2018 to consider the unaudited financial statements for the period ended 30 September. 


The Board of Directors of UAC Nigeria Plc has notified the Nigerian Stock Exchange and interested parties that the board will be meeting on 30 October 2018 to consider the unaudited financial statements for the period ended 30 September. 


The Board of Directors of FCMB Group Plc has notified the Nigerian Stock Exchange and investing public that release of the consolidated third quarter results for the period ended 30 September would be delayed until 29 November. 


Reporting for EasyKobo on Wednesday ,17 October 2018 in Lagos, Nigeria


Source: Vetiva Capital Management Limited


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