July 27, 2017/InvestmentOne Research

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EQUITIES:

• With trades worth c.N8.01bn, the All Share Index  trended up by +1.37% taking the index YTD return to +38.59%. This performance was largely influenced by buying interest in bellweather Consumer and Banking names such as NB (+181.68pts), GUARANTY (+121.68pts) and NESTLE (+105.01pts) which offset the decline in ACCESS (-21.06pts), WAPCO (-14.73pts) and OANDO (-14.02pts).
• Market breadth index was positive as 38 stocks gained compared to 17 stocks that declined. CONOIL (+10.12%) topped the gainers’ chart while CADBURY (-7.98%) led the laggard list.
• Activity level also strengthened significantly with volume and value traded up by +62% and +73% respectively to c.542m units valued at c.N8.01bn. UBA led the volume chart with 119m units of stocks while ZENITHBANK led the value chart with trades worth c.N1.61bn.
  

• Performance of sectoral indexes was mixed as gains in Consumer (+3.84%) and Banking (+1.75%)  were countered by declines in Oil & gas (-0.06%) and Industrial (-0.49%).
• In subsequent sessions, we expect continued support to ASI performance from expectation of positive earnings release and likelihood of corporate action announcement.
  

CURRENCY:

• At the interbank market, the NGN closed at N305-306 levels against the USD as CBN sustained its intervention near the end of trading today. However, it shed -2.54% and -3.49% to the GBP and EUR to settle at N412.07 and N367.50 respectively.
• The NGN remained relatively stable in the parallel market today, closing at N365 against the USD, N474 against the GBP and N424 against the EUR.
• Going forward, we expect the local currency to continue to see support from the CBN’s FX sales.

FIXED INCOME:

• Following inflows from OMO maturity of c.N65bn, money market rates eased slightly with O/N and OBB shedding 433bps and 450bps to berth at 11.67% and 10.67% respectively. The apex also sold c.N2.19b and c.N126.13bn worth of 189-day and 364-day bills at 17.95% and 18.55% stop rates respectively in its continued efforts at keeping tab on system liquidity in defense of the local currency.
• We expect rates to inch up in subsequent sessions as system liquidity would remain constrain on CBN’s persistent OMO bill sales.
• The bond market traded sideways today as movement in yields was mixed across tenors. On the long-dated tenors, sell pressure on 10yr benchmark bond saw yield on this instrument expanded by 4bps to 16.28% while yield on 7yr benchmark bond contracted by 5bps to 16.26%. That said, yield on the 5yr benchmark bond was however flat at 16.18%.
• We expect activity in subsequent session to be influenced by liquidity levels.
  

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