July 10, 2017/InvestmentOne Research

Please click to download the Market Report for Tuesday 11^th July 2017

EQUITIES:

• Broad-based gain across sectors saw the Nigerian stock market closed positive for the fourth day in a row with the ASI up by +0.65% to berth at 32,827.98pts. The index market capitalisation rose to c.N11.31trillion while YTD return stands at +22.15%.
• Market breadth index (+0.04x) also closed positive as 24 stocks led by NEIMETH (+9.38%) advanced compared to 20 decliners topped by UBN (-6.27%).
• Volume and value turnover inched up by +20% and +4% as investors exchanged over 218m units of stocks worth c.N2.11bn in 4,991 deals. UBA and NIGERINS were the most actively traded stocks with 35m and 19m units of stocks respectively.
• The Banking tracker was the best performer gaining +2.02% due to uptick in GUARANTY (+2.57%), ZENITHBAK (+3.33%) and ACCESS (+2.30%) while Oil & Gas (+0.36%), Industrial (+0.32%) and Consumer (+0.22%) closed marginally up.
• In subsequent session, we see support to ASI performance from investors’positioining in quality names on expectation of positive Q2 2017 earnings scorecards.

CURRENCY:

• As CBN maintained its daily intervention at the end of trading at the interbank market, the NGN continued to close at N305-306 levels against the USD. However, the NGN lost -0.84% to N404.98 against the GBP and -1.24% to N359.13 against the EUR.
• While the NGN remained flat at N368 against the USD and N470 against the GBP at the parallel market, it shed c.-1% to N418 against the EUR. The NGN also depreciated at the Investors and Exporters’ FX window, falling by -0.40% to close at N363.33 against the USD.
• In the coming sessions, we expect the NGN to continue to see support from CBN’s recent intervention, selling c.$140m into the market earlier this week.

FIXED INCOME:

• CBN conducted another OMO auction today, selling N26bn worth of bills at 17.95% and 18.55% stop rates. Despite this, the Overnight and Open-Buy-Back rates fell to 16.17% and 15.00%, from 28.17% and 25.33% respectively, as system liquidity stood at -N58bn today, against -N105bn yesterday. As at time of writing, NIBOR rates were yet to be published.
• Investors remained largely bearish in the bond market today, which may not be unconnected with CBN’s continued squeeze on system liquidity and its recent FX sales. The expansion in yields was more prominent at the tail end of the curve with the yields on the July 2030 and July 2034 up 2bps to 16.11% and 15.98% respectively. Although the yields on 5yr and 7yr benchmark bonds were unchanged at 16.10% and 15.95% respectively, yield on the 10yr benchmark bond inched up 2bps to 16.26%.
• Going forward, the DMO will be conducting a N135bn bond auction on Wednesday, reopening the July 2021, March 2027 and April 2037 FGN bonds. Given the recent uptrend in yields, there remains a possibility that the stop rates at the auction may be higher than the outcome of the June 2017 auction.
  

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