Market loses 27bps on Friday, ASI up 31bps w/w 

08 March 2019 : In its third negative session this week, the NSE ASI lost 27bps today, capping w/w gains at +31bps w/w. Notably, the Consumer Goods sector posted the highest loss today, dropping 98bps d/d (-102bps w/w) following losses in DANGFLOUR (-793bps d/d) and NB (-402bps d/d). Similarly, the Banking sector moderated 14bps d/d after a 142bps d/d gain in ZENITHBANK was erased by losses in UBA (-129bps d/d) and GUARANTY (-93bps d/d). A 38bps d/d decline in WAPCO also dragged the Industrial Goods sector 5bps lower today. Meanwhile, the Oil & Gas sector (+25bps) was the sole gainer thanks to a 179bps uptick in OANDO. 

Following a tepid week driven by investor apathy and barring any political unrest, analysts foresee tepid activity, with the possibility of bargain-hunting. Analysts also expect further earning releases drive a bit of interest in the equity market.. 

Stock Watch: Despite a 4.95% gain on Friday, PZ has lost 13% this week – the worst perfoming stock in the week. The stock currently trades at N11.65, 3.72% below its year open price (Consumer Goods sector: 3.39%). 

Bearish sentiment drives secondary market 

The CBN sold N817 billion (N850 billion offered) in four OMO auctions this week across the short and mid-dated maturities at stop rates of 11.90% and 13.45% respectively. Notably, the CBN did not offer the longest dated bill at any of the auctions this week. Amidst this, the Interbank Call rate declined 716bps w/w to settle at 9.17%. 

Meanwhile, trading in the treasury bills market was negative for most of the week, with yields advancing in four of five sessions. Overall, T-bill yields advanced 47bps on average w/w. Notably, the yields on the 41DTM and 181DTM bills advanced 289bps and 133bps respectively to settle at 10.46% and 14.24%. Similarly, demand from foreign participants tapered off in the bond space and sell-offs persisted as investors continued to take profit, with yields on benchmark bonds advancing 23bps w/w. Specifically, the yields on the 13.98% FGN FEB 2028 and 16.2499% FGN APR 2037 advanced 45bps and 41bps respectively to settle at 14.31% and 14.25%. 

The DMO recently released the March Bond circular, indicating a lower supply of N100 billion (February sale: N150 billion) with only N20 billion of the 10-year maturity on offer (February sale: N136 billion). On the back of this, analysts foresee increased demand in the bond secondary market next week. That said, analysts anticipate a tepid T-bills market as the CBN continues to mop-up liquidity. 

Corporate Disclosures 

The Board of Directors of Global Spectrum Energy Services Plc has notified the Nigerian Stock Exchange and shareholders of a meeting scheduled for March 27 2019 to consider the Audited Financial Statements for year ended December 31, 2018 and a closed period from March 7 2019 to March 31 2019 or until 24 hours after the audited statements have been released.

Reporting for EasyKobo on Friday , 08 March 2019 in Lagos, Nigeria

Source: Vetiva Capital Management Limited