July 19, 2017/InvestmentOne Research

Please click to download the Market Report for Wednesday 19^th July 2017

EQUITIES:

• The NSE-ASI continued the bullish momentum today as it closed up +0.23%. The equities market closed positive for the tenth consecutive trading session  as it berth at 33,514.93pts with a market capitalisation of N11.55bn and a YTD return of +24.71%.
• The gains in ZENITHBANK (+41.14pts), STANBIC (+28.82pts) and FBNH (+26.13pts) offset the declines in DANGCEM (-99.23pts), NESTLE (-38.08pts) and UBN (-9.86pts).
• Sector performance was mixed in today’s trading session. While the Oil & Gas (+1.44%) and Banking (+1.07%) sectors inched up today, the Industrial (-0.47%) sector was down while Consumer Goods sector however closed flat.
  

• The Market Breadth Index (MBI) was neutral as there were equal number of gainers and decliners. 24 stocks led by TRANSCORP (+8.76%) gained while PRESCO (-4.99%) topped the decliners chart of 24 stocks.
• In today’s session, investors exchanged c.331m stocks worth N3.24bn in 4,055 deals. This represents a huge decline from yesterday’s activity levels when 2.4bn units of shares worth N21.61bn were exchanged. ZENITHBANK stocks accounted for c.33m units of total volume. 
• Going forward, expectation of positive Q2 2017 results and the recently amended PFA guidelines may contribute to sustained interest in equity. That said, given the potential for profit taking, we advise investors to stick to quality names over the medium to long term. 

CURRENCY:

• The Naira recouped yesterday’s loss against the USD, firming by +3.16% to record a close of N305.35 while closing relatively flat against the GBP and EUR to end the session at N409 and N362 respectively. At the IEFX window, NGN closed at N367.60 to the USD with intraday high of N369 and a low of N306.
• At the parallel market, the local unit remained unchanged against the USD, GBP and EUR at N367, N473 and N420 respectively.
• In the coming sessions, we expect continued support to NGN performance from FX sales by the apex bank as well as traction at the IEFX window.

FIXED INCOME:

• The Overnight and Open-Buy-Back rates declined by 17bps and 42bps to 4.83% and 5.25% today, which may not be unconnected with the c.N97bn worth of OMO bills maturing tomorrow. As at time of writing, NIBOR rates were yet to be published.
• While the CBN did not conduct an OMO auction today, the Apex bank sold N205bn worth of 91, 182 and 364-day bills at 13.425%, 17.3989% and 18.549% stop rates respectively. We point out that these stop rates were largely in line with the last auction a fortnight ago.
• At the bond market, investors were largely bearish as yields trended north on average. This expansion was more prominent on short dated maturities with the yields on the June 2019 and Feb 2020 bonds up 10bps and 7bps to 16.72% and 16.51% respectively. While the yield on the 5yr benchmark bond remained unchanged at 16.12%, yield on the 7yr benchmark bond inched up 9bps to 16.16%. The yield on the 10yr benchmark bond fell by 2bps to 16.24%.
• We expect activity in subsequent sessions to be influenced by liquidity levels.
  

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