September 19, 2019/InvestmentOne Research

Please click to download the Market Report for Tuesday 19^th September 2017

EQUITIES:  

• The equities market closed down marginally today as investor sentiment, as gauged by the market breadth index (-0.11x), ended negative.
• The market’s performance was largely driven by the sell-off in NB (-46pts), FBNH (-28pts), PZ (-12pts), SEPLAT (-11pts) and UBA (-11pts), which outweighed the gains in NESTLE (+55pts) and GUARANTY (+46pts).
• As a result, the ASI closed down -0.08% to 34,846.82pts, representing a market capitalisation of N12.01tr.
• 24 stocks declined, led by FBNH (-4.99%), against 14 stocks that advanced with LINKASSURE (+5.00%) the best performer.
• With the exception of the Banking sector (+0.36%), all major sectors ended in the red led by Oil & Gas down -1.02%. Consumer Goods (-0.15%) and Industrial (-0.36%) sectors also ended negative.
• However, activity levels improved with total volume up +7% while total value surged +84%, compared to yesterday’s session, as investors exchanged 175m units of shares worth N2.83bn. GUARANTY (+1.42%) was the most actively traded stock with c.34m units of shares worth N1.3bn.
• Given the absence of a positive catalyst to sustain a momentum, we expect the equities market to remain volatile in the near term. With this said, we are of the view that the recent sell-off represents an entry opportunity in our recommended quality names.
  

CURRENCY:

• The NGN depreciated against major currencies at the IEFX window, falling by -2.44% to N428.82 against the EUR, -1.91% to N483.29 against the GBP and -0.32% to N360.22 against the USD.
• At the parallel market, the local currency appreciated by +0.55% to N367 against the USD while it remained relatively unchanged at N485 against the GBP and N436 against the EUR.
• In our opinion, the NGN’s appreciation against the USD may not be unconnected with CBN’s recent USD545m FX market sale. We expect the Apex bank’s intervention to continue to be supportive of the NGN in the near term.
  

FIXED INCOME:

• Despite CBN selling c.N15bn worth of OMO bills at 16.00% and 17.95% stop rates, the Open-Buy-Back and Overnight rates declined by 83bps and 108bps to 9.50% and 10.33% respectively on the back of unsuccessful FX bids returning to the market and participants anticipating the N140bn OMO maturity on Thursday.
• As at time of writing, today’s NIBOR rates were yet to be published.
• CBN will be conducting a T-bill auction tomorrow, offering N141bn worth of 91-day, 182-day and 364-day bills, with the stop rates likely to be fairly unchanged at 13.25%, 17.36% and 17.75% respectively.
• Similar to yesterday, the Apex bank’s OMO sales continued to constrain activity levels. Consequently, yields on the 7yr and 10yr benchmark bonds closed unchanged at 16.31% and 16.43% respectively. However, the yield on the 5yr benchmark bond fell by -5bps to 16.13%.
• Going forward, we expect market activity to be influenced by liquidity levels.

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