Investors raid secondary market amid PMA oversubscription 

15 November 2018 : The CBN held its scheduled PMA yesterday, offering and selling N128 billion across the 91DTM, 182DTM and 364DTM bills at stop rates of 10.95%, 13.16% and 14.45% respectively (effective yield: 11.26%, 14.08% and 16.88%). Amid this, the interbank call rate advanced 8bps to settle at 5.75%. 

• Meanwhile, mixed activity persisted in the T-bills space, with yields declining 1bp on average, driven by demand on select maturities. Notably, yield on the 36DTM paper declined 21bps to settle at 12.53% while yield on the 78DTM paper advanced 21bps to settle at 12.73%. The bond space was more positive, as yields declined 3bps on average across benchmark bonds. Most notably, yields on the 15.54% FGN FEB 2020 and 14.20% FGN MAR 2024 declined 16bps and 18bps respectively to settle at 14.90% and 15.25%. 

• Analysts expect today’s OMO maturity of N318 billion to support demand in the T-bills space. That said, an open market operation from the CBN could dampen the strength of demand. On the other hand, analysts expect activity levels to remain mildly positive in the bond space, following the release of November’s bond circular. 

Tepid trading leads market to moderate red close 

The NSE ASI continued its tepid market performance yesterday with a 6bps decline. 

• The Banking sector was the big loser, shedding 30bps as DIAMONDBNK (-952bps), ZENITHBANK (-82bps) and UBA (-63bps) all posted losses. On the other hand, the Consumer (+5bps) and Industrial Goods (+2bps) sectors posted minor upticks thanks to gains in NB (+61bps) and CCNN (+56bps). Finally, the Oil & Gas sector moderated 1bp after losses in SEPLAT (-229bps) and ETERNA (-917bps) outweighed a gain in OANDO (+100bps). 

Market breadth turned positive with 16 advances and 15 declines. 

Market Outlook 

Analysts expect the current mixed trading sentiment to persist in today’s session as sustained investor apathy continues to drive varied price movement. 

Stock Watch: OANDO has gained 9% in the last 3 sessions to settle at N5.05. The stock has lost 16% ytd, underperforming the Oil & Gas sector (-11% ytd). 

Corporate Disclosures 

The Board of Directors of Goldlink Insurance Plc has notified the general public of an emergency board meeting which was scheduled for 14 November 2018 to approve the 2017 audited financial statements of the company following the approval by the Statutory Audit Committee. . 

The Board of Directors of FTN Cocoa Processors Plc has informed shareholders, stakeholders and the general public that the company has filed its audited financial statements for the year ended 31 December 2017 and the Interim financial statements for the periods ended 31 March, 30 June and 30 September 2018 respectively. 

The Board of Directors of Nigerian Breweries Plc has confirmed that officials of National Lottery Regulatory Commission sealed up its Headquarters premises and two of its office premises over disputed fees on the company’s consumer sales promotions.

Reporting for EasyKobo on Thursday , 15 November 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited