September 22, 2017/InvestmentOne Research

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EQUITIES:  

• The equities market ended the last trading session of the week positive following the gains in DANGCEM (+148pts), GUARANTY (+55pts), UBA (+45pts) and WAPCO (+29pts), which more than offset the sell-off in NB (-46pts), INTBREW (-13pts) and UBN (-10pts).
• Consequently, the NSE-ASI closed up +0.85% to 35,488.81pts, representing a market capitalisation of N12.23tr. WTD the market gained +1.38%.
• Furthermore, market breadth index ended positive (+0.08x) as 22 stocks gained against 14 stocks that declined. UNILEVER (+5.00%) led the gainers’ chart against JBERGER (-4.99%), which was the worst performer.
• While Consumer Goods (-0.11%) closed in the red, all other major sectors ended positive with Industrial (+2.30%) the best performer. The Banking (+1.16%) and Oil & Gas (+0.13%) sectors also closed in the green.
• Total volume and value declined by -55% and -58% respectively, compared to yesterday, as investors exchanged 192m units of shares worth N3.7bn. Similar to yesterday, GUARANTY (+1.67%) was the most actively traded stock with c.40m units of shares worth N1.55bn.
• Nonetheless, we expect the equities market to remain volatile in the near term given the absence of a positive catalyst to sustain a momentum. 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 appreciated by +2.81% to N474.10 against the GBP and +2.36% to N419.20 against the EUR while it remained fairly unchanged at N360.39 against the USD at the IEFX window.
• At the parallel market, the NGN closed relatively flat at N367 against the USD, N488 against the GBP and N437 against the EUR.
• In the coming week, we expect the local currency to continue to see support from the CBN’s FX sales.
  

FIXED INCOME:

• CBN conducted another OMO auction today selling N50bn worth of bills at 16.00% and 17.95% stop rates as the Apex bank maintained it stance in keeping liquidity levels low. Consequently, the Open-Buy-back and Overnight rates jumped to 35.00% and 38.00% from 10.67% and 11.58% respectively.
• As at time of writing, today’s NIBOR rate were yet to be published.
• Yield movement in the bond market was mixed today, however on average investors were largely bullish particularly on the 10yr benchmark bond with the yield down 34bps to 15.89%. While the yield on the 7yr benchmark bond was unchanged at 16.31%, yield on the 5yr benchmark inched up 8bps to 15.89%.
• In the near term, we believe market activity may largely be influenced by liquidity levels as well as foreign investor participation.

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