January 2, 2017/InvestmentOne Research

Please click to download the Market Report for Tuesday 2^nd January 2018

EQUITIES:

·         The equities market closed the first trading session of the year positive, inching up +0.06% to end at 38,264.79pts.

·         Today’s performance was largely driven by the gains Banking names; ZENITHBANK (+26pts), ACCESS (+13pts), UBA (+12pts) and FIDELITY (+11pts) as well as DANGSUGAR (+13pts), which more than outweighed the sell-off in ETI (-39pts), UBN (-24pts), STANBIC (-17pts) and GUARANTY (-17pts).

·         Major sector performance was mixed with the Consumer Goods (+0.26%) and Industrial (+0.19%) gaining while the Oil & Gas (-0.38%) and Banking (-0.04%) ended in the red.

·         Market breadth index also ended positive (+0.16x) as 27 stocks advanced compared with 13 stocks that declined. FCMB (+6.76%) was the market’s best performer while NEM (-4.82%) led the losers’ chart.

·         With this said, market activity levels declined with total volume and value down -56% and -74% respectively as investors exchanged 249million units of shares worth N1.78billion. TRANSCORP (+1.37%) was the most actively traded stock with c.103million units of shares worth c.N151million.

·         In the near term, we expect investors to take advantage of the recent sell-off in the equities market in anticipation of the release of full year results in Q1 2018. 

CURRENCY:

·         The Naira depreciated at the IEFX window today, falling by -0.29% to N486.97/USD, -0.19% to N361.00/USD and -0.36% to N432.11/EUR.

·         At the parallel market, the NGN gained +0.42% to N482/GBP while it remained fairly unchanged at N363/USD and N426/EUR.

·         In the near term, we expect the local currency to continue to see support from CBN’s intervention sales on the back of the improvement in global oil prices and domestic production levels. 

FIXED INCOME:

·         Money market rates expanded across all tenors today, which may not be unconnected with the announcement of an OMO auction earlier in the day. The 1month and 3month NIBOR rates jumped +73bps and +63bps to 14.24% and 16.02% respectively while the 6month NIBOR rate rose by just +3bps to 17.22%. CBN sold N58billion worth of OMO bills today at 12.75% and 14.55% stop rates.

·         Yields in the bond market contracted on average with the decline most noticeable on the January 2026 bond, down -20bps to 14.04%. However, there were bearish sentiments towards bond at the tail end of the curve with the yield on the March 2036 surging +73bps to 14.08%. Yields on the 7yr and 10yr benchmark bonds fell by -12bps and -1bp to 13.99% and 14.11% while the yield on the 5yr benchmark bond was unchanged at 14.03%.

·         Going forward, we believe market activity levels may continue to be influenced by foreign investor participation and liquidity levels. 

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