August 7, 2017/InvestmentOne Research

Please click to download the Market Report for Monday 7^th August 2017

EQUITIES:

• The benchmark NSE-ASI opened the week on a positive note with a gain of +0.27%, supported largely by buying interest in heavy weight Consumer as well as Industrial  tickers. The index YTD return stands at 39.63% while market capitalisation rose to c.N12.93trillion.
• Buying interest in NB (+123.51pts), NESTLE (+77.49pts) and WAPCO (+14.59pts) was largely responsible for today’s gain, offsetting the decline in DANGCEM (-60.00pts), STANBIC (-13.97pts) and UBA (-13.73pts).
  

• CCNN (+10.16%) led the list of 23 gainers while MANSARD (-4.61%) topped the list of 28 laggards. As such, market breadth index closed negative.
• Activity level declined compared to previous session as volume and value turnover came in lower by -51% and -8% to 254m units of stocks valued at c.N5.79bn. ACCESS topped the volume chart with over 43m units of stocks traded while NB led the value chart with c.N2.19bn worth of trades.
• Performance of major sectoral indices was mixed as gains in Consumer (+2.18%) and Industrial (+0.59%) were countered by decline in Banking (-0.20%) and Oil & Gas (-0.18%).
• In subsequent session, we expect the ASI performance to continue to see support from expectation of positive Q2 2017 earnings scorecards from Tier 1 banking players as well as potential for corporate action announcement.
  

CURRENCY:

§  At the IEFX window the NGN shed -0.26% to N367.38 against the USD, -0.67% to N475.38 against the GBP and -1.15% to N430.24 against the EUR.

• The NGN also deprecated at the parallel market today, falling -0.27% to N366 against the USD, -0.21% to N476 against the GBP and -0.93% to N428 against the EUR.
• Going forward, we are likely to see the CBN maintain its FX sales which should be supportive of the local currency.

FIXED INCOME:

• The CBN maintained its tight monetary policy stance selling OMO bills worth N121.8m and c.N34.3bn at 17.95% and 18.55% stop rates respectively.  Consequently, money market rates inched up. The Overnight and Open-buy-back rates advanced by +500bps and +467bps to close at 27.50% and 26.67% respectively. As at time of writing, NIBOR rates were yet to be published.
• We expect upward bias on rates in subsequent session as system liquidity would remain constrained by OMO bills sales.
• At the bond market, the yields on the 5yr, 7yr and 10yr benchmark bonds remained unchanged at 16.19%, 16.30% and 16.29% respectively. This may not be unconnected with the CBN’s continued squeeze on system liquidity. However, the yield on the June 2019 bond declined by 4bps to 16.79% at close.
• In the coming sessions, we expect market activity to be influenced by liquidity levels.
  

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