September 21, 2017/InvestmentOne Research

Please click to download the Market Report for Thursday 21^st September 2017

 EQUITIES:  

• Similar to yesterday, the equities market’s performance was largely driven by DANGCEM (-167pts). The profit taking on DANGCEM outweighed the gains in NB (+115pts), FBNH (+24pts) and GUARANTY (+21pts) as the ASI ended down -0.05% to 35,188.97pts.
• With this said, market breadth index closed positive (+0.05x) for the first time in 12 consecutive trading sessions. 25 stocks advanced led by NEIMETH (+4.92%) compared with AIICO (-5.36%) which topped the 20 stocks that declined.
• Furthermore, market activity surged as investors exchanged 429m units of shares worth N8.68bn, representing a +213% surge in total volume and a +665% spike in total value, compared to yesterday’s session. GUARANTY (+0.65%) was the most actively traded stock with 172m units of shares worth N6.7bn.
• However, major sector performance was mixed as the Banking (+0.23%) and Consumer Goods (+1.26%) closed in the green, while the Industrial (-0.54%) and Oil & Gas (-0.65%) sector ended negative.
• 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 gained +0.09% to N360.33 against the USD and +0.39% to N429.08 against the EUR while it shed -0.02% to N487.44 against the GBP at the IEFX window.
• At the parallel market, the NGN closed unchanged at N367 against the USD and N436 against the EUR while it gained +0.61% to N487 against the GBP.
• In the near term, we expect the local currency to continue to see support from CBN’s FX sales on the back of rising oil production and prices.
  

FIXED INCOME:

• Despite CBN selling N208bn worth of OMO bills today in an attempt to offset the N140bn OMO maturity, money market rates declined across all tenors. The 6month NIBOR rate fell by 184bps to 20.58% while the 1month and 3month NIBOR rates were down 18bps and 43bps to 16.75% and 19.96% respectively.
• Investors were largely bullish in the bond market today which may not be unconnected to the low stop rates at the T-bill auction yesterday, unsuccessful bids from the T-bill auction and the OMO maturity today. The decline in yields was most prominent on the Feb 2020, down -35bps to 15.94%. While the yield on the 7yr benchmark bond was flat at 16.31%, yields on the 5yr and 10yr benchmark bonds were down -21bps and -13bps to 15.81% and 16.22% respectively.
• In the near term, we expect market activity to be influenced by liquidity levels.

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