August 24, 2017/InvestmentOne Research

Please click to download the Market Report for Thursday 24^th August 2017

EQUITIES:  

• Following the profit taking on DANGCEM (-411pts) and ZENITHBANK (-36pts) as well as the declines in UNILEVER (-24pts) and ACCESS (-19pts), which more than outweighed the gains in NB (+68pts), UBN (+24pts) and UBA (+22pts), the NSE-ASI closed down -1.30% to 36,575.86pts.
• Furthermore, Consumer Goods (+0.22%) was the only major sector to closed positive. The Industrial sector was the worst performer (-1.94%) while the Oil & Gas and Banking sectors declined by -1.75% and -0.41% respectively.
• Also market breadth index ended negative as 26 stocks declined led by MRS (-5.02%) against 18 stocks that gained, topped by UBN (+5.08%).
• While the total value of shares traded remained relatively flat, total volume decreased by -10% compared to yesterday’s session as 238m units of shares worth N5.49bn was traded today. GUARANTY (-0.49%), which was marked down for its interim dividend today, was the most actively traded stock with c.71m units of shares worth N2.9bn.
• The NSE-ASI closed negative today following the profit taking on DANGCEM and ZENITHBANK while market breadth index also ended in the red, an indication of investor sentiment. Despite this, market activity remained resilient with investors exchanging N5.5bn worth of shares. Going forward, we expect the market to remain volatile as Q2 2017 earnings season comes to end.

CURRENCY:

• The NGN appreciated at the IEFX window today, gaining +1.53% to N355.55 against the USD, +0.81% to N459.64 against the GBP and +0.89% to N423.79 against the EUR.
• At the parallel market, the NGN remained relatively flat at N370 against the USD, N475 against the GBP and N432 against the EUR.
• In the coming sessions, we expect the local currency to continue to see support from the CBN’s FX sales.
  

FIXED INCOME:

• CBN sold close to N22bn worth of OMO bills at 17.95% and 18.95% stop rates as it continued to squeeze system liquidity. However, the Open Buy Back and Overnight rates fell to 9.50% and 10.08%, from 91.67% and 96.00% respectively as N96bn worth of OMO bills matured today. As at time of writing, NIBOR rates were yet to be published.
• While the Apex bank sustained its stance on system liquidity, which constrained market activity today, investors were largely bearish in the bond market as yields expanded on average. The  majority of this occurred on the mid to long end of the curve, which may not be unconnected with yesterday’s bond auction where the DMO sold FGN bonds at higher stop rates (55bps to 65bps) than the July bond auction.
• Yields on the 5yr and 7yr benchmark bond were flat at 16.37% and 16.40% respectively while the yield 10yr benchmark bonds expanded by 31bps to 16.84%. Furthermore, the yields on the March 2036 and April 2037 surged by 40bps and 37bps to 16.78% and 16.86% respectively.
• Going forward, we expect market activity to be largely influenced by liquidity levels.

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

Please click to download the Market Report for Thursday 24^th August 2017