June 8, 2017/InvestmentOne Research

Please click to download the Market Report for Thursday 8^th June 2017

EQUITIES:  

• The Nigerian bourse sustained yesterday’s positive momentum with the ASI up by +0.77% on account of renewed buying interest in tickers across major sectors.  The index YTD return now stands at 22.56%.
• Buying interest in SEPLAT (+64.19pts), ACCESS (+58.96pts) and ZENITHBANK (+42.96pts) influenced today’s positive close, cancelling out the losses in DANGCEM (-196.97pts), GUARANTY (-12.85pts) and JBERGER (-7.15pts).
• In today’s session, there were 45 gainers led by FO (+10.12%) as against 15 losers topped GOLDBREW  (-4.71%). As a result, investors’ sentiment as gauged by market breadth index (+0.27x) closed positive.
• Activity levels also strengthened slightly with volume and value turnover up by +6% and +19% respectively to 528m units of stocks valued at c.N4.84bn. ACCESS was the most actively traded stocks both in volume and value term with over 81m units of stocks worth c.N832m.
• In the near term, we expect profit-taking on recent gains in the index. That said, we however reiterate our expectation of continued support to ASI’s performance from recent reform in the FX market as well as new PFA guideline which requires increased investment allocation to equity.

CURRENCY:

• As CBN maintained its daily intervention at the close of trading at the interbank market, the local currency remained unchanged N305-306 levels against the USD. However, the NGN appreciated by +0.29% to N406.09 against the GBP and +0.52% to N352.37 against the EUR.
• At the parallel market, the local currency remained unchanged at N368 against the USD, N465 against the GBP and N410 against the EUR at the close of trade today.
• At the Investors and Exporters’ FX window, the NGN shed -0.47% to close at N375.31 against the USD. We expect NGN performance to continue to see support from FX sales by CBN and improved liquidity at the IEFX window.
  

FIXED INCOME:

• Despite the inflows from the N74bn OMO maturities today, the Overnight and Open Buy Back rates increased to 81.67% and 78.33%, from 27.50% and 25.00% yesterday respectively. This may not be unconnected with the N17bn sale of OMO bills at 18.00% and 18.60% stop rates today as the Apex bank maintained its objective of squeezing system liquidity in defence of the local currency.
• As at time of writing the NIBOR rates for today were yet to be published.
• Following the OMO maturities today, investors were largely bullish in the bond market despite CBN’s efforts to constrain liquidity. The decline in yields was most prominent on the 7yr benchmark bond, down 15bps to 15.88%. The yields on the 5yr and 10yr benchmark bonds shed 12bps and 9bps to 16.02% and 16.07% respectively.
• Going forward, we expect ma5rket activity to be influenced by liquidity levels.

Below are key NSE statistics as at the end of trades: