June 28, 2017/InvestmentOne Research

Please click to download the Market Report for Wednesday 28^th June 2017

 EQUITIES:

• Following the three consecutive trading sessions last week when the market lost  -6.56%, the NSE-ASI closed positive today, gaining +1.67% to end at 32,657.30pts, representing a market capitalisation of N11.29tr.
• Today’s performance was largely driven by the gains DANGCEM (+218pts), Tier 1 banking names; GUARANTY (+129pts), UBA (+72pts) and ZENITHBANK (+23pts), and NB (+61pts), which combined to more than offset the decline in UNILEVER (-24pts).
• Furthermore, all major sectors ended positive with Banking (+3.16%) the best performer. The Industrial and Consumer Goods sectors gained +1.08% and +0.84% respectively, while the Oil & Gas closed up +0.40%.
  

• Also, market breadth index closed positive at +0.04x, as 26 stocks gained while 21 stocks declined. UBA (+8.17%) was the market’s best performer against OKOMUOIL (-4.99%), which led the losers’ chart.
• While the total number of shares fell -8% compared to the last trading session, last week, total value inched up +2% as investors exchanged 386m units of shares worth N3.3bn. UBA (+8.17%) was the most actively traded stock with 87m units of shares accounting for c.23% of total volume.
  

• Going forward, we expect the market to see support from the PFA investment guidelines and the reforms in the FX market. However, we highlight the potential for profit taking.
  

CURRENCY:

• The NGN dipped marginally by -0.02% against the USD to close at N305.90 while shedding -1.63% and -1.48% against the GBP and EUR to berth at N407.55 and N357.99 respectively..

§  At the parallel market, the Naira lost N2 to the USD to close at N370. It however trended mixed against the GBP and EUR, gaining N2 against the GBP to settle at N465 but closed flat at N410 to the EUR.

§  We expect NGN performance to continue to see support from FX sales by the apex bank and improved liquidity at the IEFX window.

FIXED INCOME:

• Money market rates inched up moderately across tenors as CBN sold c.N1.8bn and c.N52.03bn in 176-day and 358-day bills at 18.0% and 18.6% stop rates respectively. Both the O/N and OBB gained 42bps and 25bps to end today’s session at 9.50% and 8.75% respectively. The 1month, 3month and 6month NIBOR rates advanced by 9bps, 5bps and 3bps to close at 19.42%, 21.42% and 23.70% respectively.
• We expect improvement in system liquidity from c.N236bn OMO maturity hitting the system tomorrow. That said, we however expect CBN to sell OMO bills in defence of the local currency.
• In response to limited system liquidity, the bond market was relatively bearish today with slight upward movement in some tenors. While yields on the 5yr and 7yr benchmark bonds closed flat, yield on the 10yr benchmark expanded 6bps to close at 16.08%.
• We expect activity in subsequent session to be influenced in liquidity levels.
  

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