October 9, 2017/InvestmentOne Research

Please click to download the Market Report for Monday 9^th October 2017

EQUITIES:  

• The equities market closed in the green for the fourth consecutive trading session on the back of the gains in DANGCEM (+315pts) and GUARANTY (+113pts). These gains more than offset the sell-off in Banking names; ACCESS (-13pts) and UBA (-7pts).
• Consequently, the ASI ended up +1.41% to 36,831.93pts representing a market capitalisation of N12.68tr.
• Furthermore, all major sectors closed in the green with Banking (+1.32%) the best performer. The Industrial and Oil & Gas sectors gained +1.21% and +1.40% respectively while the Consumer Good sector inched +0.40%.
• Also market breadth index ended positive (+0.06x) as 27 stocks gained compared with 21 stocks that declined. MAYBAKER (+7.63%) was the best performer while AGLEVENT (-4.84%) led the losers’ chart.
• However, turnover declined with total volume and value down -29% and -30% respectively as investors exchanged 262m units of shares worth N3bn. DIAMONDBNK (-4.55%) was the most actively traded stock with 76m units of shares but ZENITHBANK (+0.96%) topped the value chart with N595m worth of shares exchanged.
• In the near term, we expect markets direction to be influenced by investors positioning for the release of Q3 2017 scorecards.
  

CURRENCY:

• At the IEFX window, the local currency continued to close at N360 levels against the USD. However, the Naira gained +0.51% to N419.99 against the EUR and shed -0.13% to N470.30 against the GBP.
• While the NGN remained relatively flat at N363 against the USD and N478 against the GBP, it depreciated by c.-1.00% to N425 against the EUR at the parallel market.
• Going forward, we expect the NGN to continue to see support from the CBN’s FX sales.
  

FIXED INCOME:

• The Open-Buy-Back and Overnight rates spiked to 29.17% and 32.08%, from 25.84% and 26.00% respectively as CBN continued to squeeze system liquidity via OMO sales. As at time of writing, today’s NIBOR rates were yet to be published and the results of the OMO auction were yet to be released.
• In the bond market, yield movement was fairly muted, which may not be unconnected with the announced OMO auction today. While the yields on the 5yr and 7yr benchmark bonds were unchanged at 15.83% and 15.07% respectively, yield on the 10yr benchmark bond jumped 28bps to 15.36%.
• In the coming sessions, we expect market activity to be influenced by liquidity levels and foreign investor participation.

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