Bills and Equity, what happened last week?   

Industrials and Banking boost market to positive w/w 

22 October 2018 : In an even split between sector gainers and losers, the All-Share Index closed 54bps higher today and +119bps up w/w, the second positive week in a row. Meanwhile, activity levels dropped in today’s session, with market turnover falling to N1.5 billion. The Industrial Goods sector (d/d: +104bps; w/w : -55bps) was once again the big winner, after a gain in DANGCEM (d/d: +194bps; w/w: +500bps) erased CAP’s 306bps loss. The Banking sector (d/d: +98bps; w/w: +104bps) also gained after a large jump in ACCESS (d/d: +641bps; w/w: +375bps) and ZENITHBANK (d/d: +155bps; w/w:+ 315bps). On the other hand, the Consumer Goods sector (d/d: -78bps; w/w: -63bps) was the biggest loser on the day, after PZ (d/d: -159bps), NESTLE (d/d: -214bps), NB (d/d: -11bps; w/w:+57bps) and DANGSUGAR (d/d: -68bps) all suffered losses. Finally, the Oil & Gas sector closed out the week with a 24bps dip, making it the heaviest loser for the week (w/w: -87bps) driven by a steep decline in FO (d/d:-923bps; w/w:-41bps). 

Although performance was positive at week close, market breadth stayed negative, with investor sentiment favouring sell-side activity. Therefore, analysts anticipate a mixed start to next week’s trading. 

Stock Watch: OKOMUOIL released its 9M’18 results today, with top and bottom line coming in line with analyst's estimates, albeit up 1% and 13% y/y respectively. The stock has returned 18% year-to-date and currently trades at a price of N79.80. 

Market closes bearish amidst constrained liquidity levels 

In spite of stretched system liquidity levels following yesterday’s large OMO sale of N275 billion (N350 billion offered), the Interbank Call rate declined 66bps to close at 12.67%. Meanwhile, the DMO released the October bond offer circular, indicating a planned supply of N115 billion (September offer: N90 billion) across the 12.75% APR 2023, 13.53% FEB 2025 and 13.98% FEB 2028 FGN bonds. 

Although trading in T-bills space was mixed d/d, yields advanced 7bps on average w/w. Whilst the 76DTM and 328DTM bills advanced 64bps and 36bps to settle at 13.45% and 15.75% respectively, buying was noted on select maturities with the yields on the 34DTM bill declining 26bps to settle at 12.95%. The bond market was broadly negative with benchmark yields advancing 4bps d/d (w/w: +12bps) amid sell-offs across the space. Notably, yields on the 14.50% FGN JUL 2021 and 16. 39% FGN JAN 2022 bonds moderated 44bps and 30bps to settle at 15.16% and 14.71% respectively. 

On the back of constrained liquidity following the OMO and PMA auctions, analysts expect bearish trading in the T-bills space. Following the release of the October bond circular which indicates an increase in bond supply, analysts foresee yields advancement in the bond space. 

The naira appreciated N0.20 w/w at the I&E FX Window to settle at N364.02 against the dollar and depreciated N0.50 to settle at N360.50 in the parallel market. 

Analysts expect the naira to remain stable across the various windows of the currency spaces despite CBN pause on interventions in the FX market. 

Corporate Disclosure

The Board of Directors of Scoa Nigeria Plc has notified the Nigerian Stock Exchange and the investing public of the finalizing of preparations for the next Annual General Meeting (AGM) proposed for December 2018. 

The Board of Directors of Union Dicon Salt Plc has notified shareholders and the investing public of the filing of unaudited interim accounts and half-year periods ended 31 March 2018 and 30 June 2018 respectively with The Nigerian Stock Exchange on 15 October has been scheduled for 26 October 2018. 

Reporting for EasyKobo on Monday ,22 October 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited

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