August 15, 2017/InvestmentOne Research

Please click to download the Market Report for Tuesday 15^th August 2017

EQUITIES:

• Another day of bearish close as the All Share Index shed -2.25% dragged by sell-off on tickers across sectors. The index YTD return now stands at +38.04% while market capitalization shrank to c.N13.08trillion.
• Sell pressure on DANGCEM (-496.15pts), NB (-69.26pts) and STANBIC (-59.68pts), which offset the gains in GLAXOSMITH (+3.48pts), SEPLAT (+3.28pts) and CONOIL (+2.63pts), was largely responsible for today’s decline.
• Market turnover however strengthened as investors exchanged 391m units of stocks worth c.N5.44bn in 5,285 deals. This represents +24% and +29% increase in both volume and value traded respectively. ACCESS (-0.38%) led both the volume and value charts with c.179m units of shares worth c.N1.86bn.
• Investor sentiment, as gauged by market breadth sentiment, also closed negative as 35 stocks declined compared to 11 stocks that gained points. MORISON (-8.16%) topped the laggard list while GOLDBREW (+4.71%) led the gainers’ chart.
• All major sectoral indexes closed in the red; Industrial (-4.15%), Consumer (-1.02%), Banking (-1.25%) and Oil & Gas (-0.39%).

§   With H1 2017 results of tier 1 banks, UBA and ACCESS, yet to be released, we may see upward price correction particularly in these banking names as investors are likely to build position in anticipation of dividend declaration.

CURRENCY:

• The NGN remained relatively stable against the USD recording a close of N362.38 /$ at the IEFX window while also firming by +1.13% and +0.83% against the GBP and EUR to close at N466.91 and N425.17 respectively.
• At the parallel market, the Naira weakened by -0.50% to N370 against the USD, whilst it remained fairly unchanged at N477 and N432 against the GBP and the EUR respectively.
• Going forward, we expect the NGN to continue to see support from CBN’s continued FX intervention sales.

FIXED INCOME:

§  Despite CBN announcing an OMO auction today, with the result yet to be release, the O/N and OBB rates eased to 29% and 27% from 97% and 99% levels respectively in previous session.

• The bond market was largely bearish in today’s session as limited system liquidity constrained activities. Hence, yield inched up in most of the tenors with the exception of yield on MAR 2024 (7yr benchmark) which declined by 11bps to 16.37%. That said yields on the 5yr and 10yr benchmark bonds were flat at 16.36% and 16.56% respectively.

• We expect activities in subsequent session to be influenced by liquidity levels.
  

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