Demand persists in T-bills space despite mop-up 

15 March 2019 : With N212 billion hitting the system yesterday via an OMO maturity, the CBN conducted an OMO auction, mopping up liquidity to the tune of N401 billion yesterday (N350 billion offered), across the 91DTM and 175DTM bills at stop rates of 11.84% and 13.20% (Effective rates: 12.20% and 14.09%) – lower than previous levels. Meanwhile, the Interbank Call rate advanced 125bps to 10.67%. 

In the secondary market, yields continued to decline in the T-bills space, with buy-side activity once again observed across mid to long-dated bills. As a result of this, average yields declined 13bps. Most notably, the yields on the 183DTM and 337DTM bills declined 40bps apiece to settle at 13.76% and 14.20% respectively. Meanwhile, positive trading was also sustained in the bond space, with average benchmark yields declining 4bps. Specifically, the yields on the 13.53% FGN MAR 2025 and 16.25% FGN APR 2037 bonds declined 37bps and 11bps to settle at 14.30% and 14.09% respectively. 

Analysts anticipate further downward yield adjustments in the T-bills space, driven by the lowered stop rates at yesterday’s OMO. Also, analysts expect demand on select bonds to drive positive activity today. 

Recovery short-lived, sell-off resumes to drag ASI 

The Market declined 47bps yesterday after a return of negative sentiment to the bourse, with sell-offs on select Banking and Industrial stocks dragging the ASI. 

The Industrial Goods sector was the biggest loser, declining 52bps, dragged by a decline in DANGCEM (-104bps). The banking sector (- 37bps) also declined, driven by losses in GUARANTY (-84bps), ZENITHBANK (-89bps) and ACCESS (-83bps). On the other hand, the Oil & Gas sector was the sole gainer, buoyed by a rise in OANDO (+88bps). Finally, the Consumer Goods sector closed flat after a decline in NESTLE (-32bps) cancelled out an advance in DANGFLOUR (+842bps). 

Market breadth remained negative with 9 advances to 18 declines. 

Market Outlook 

With weak investor sentiment and low market interest currently driving the tepid activity in the equity space, analysts foresee further declines at week close. 

Corporate Disclosures

The Board of Directors of Oando Plc is scheduled to meet on Thursday 28 March 2019 to consider and approve the audited financial statements of the company for the year ended 31 December 2018. The company has also declared a closed period on its stock. 

The Board of Directors of Nigerian Aviation Handling Company of Nigeria Plc has informed the Nigerian Stock Exchange that it is scheduled to meet on 27 & 28 March 2019 to consider and approve the audited financial statements of the company for the year ended 31 December 2018. The company has also declared a closed period from 13 March 2019 until 24 hours after the audited statements are released on the floor of the exchange.

Reporting for EasyKobo on Friday , 15 March 2019 in Lagos, Nigeria

Source: Vetiva Capital Management Limited