January 19, 2018/InvestmentOne Report

Please click to download the Market Report for Friday 19^th January 2018

EQUITIES:

·         The Nigerian equities market ended the last trading session of the week positive following the gains in GUARANTY (+221pts), ZENITHBANK (+63pts), STANBIC (+29pts), UBA (+25pts) and UNILEVER (+22pts), which outweighed the profit taking in FBNH (-88pts) and DANGSUGAR (-26pts).

·         Consequently, the NSE-ASI closed up +0.54% to end the week at 45,092.83pts. WTD the market gained +5.11%.

·         While the Banking (+2.46%) and Consumer Goods (+0.15%) sector ended in the green today, Oil & Gas (-0.08%) and Industrial (-0.06%) closed down.

·         Although the total volume of shares traded was relative flat compared to yesterday’s trading session, total value fell by -19.6% as investors exchanged 1.34billion units of shares worth N8.6billion. TRANSCORP (-1.57%) was the most actively traded stock with c.206million units of shares worth c.N515million.

·         Market breadth index, a gauge of investor sentiment, was negative (-0.08x) as 21 stocks advanced, compared with 29 stocks that declined. WEMABANK (+9.35%) had the best performance while MAYBAKER (-6.23%) led the losers’ chart.

·         In the near term, we highlight the potential for profit taking, which may drive the market to a negative close. However, this may present a decent entry opportunity into our recommended names in anticipation of the release of full year results later this quarter. 

CURRENCY:

·         While the NGN depreciated by -1.18% against the GBP to N497.99 and -0.54% against the EUR to N439.45, it gained +0.17% against the USD to N360.10. at the IEFX window.

·         At the parallel market, the local currency was unchanged at N440/EUR, N364/USD but shed -0.40% to N495/GBP.

·         Going forward, we expect the NGN to continue to see support from the CBN’s intervention on the back of rising global oil prices and domestic production levels. 

FIXED INCOME:

·         The Open Buy-Back and Overnight rates jumped to 16.67% and 17.67% from 5.25% and 5.75% respectively. This may not be unconnected with the squeeze on system liquidity as a result of CBN’s N126billion OMO auction as well as its FX auction earlier today.

·         As at time of writing, today’s NIBOR rates were yet to be published.

·         At the bond market, investors were largely bearish with yields expanding on most maturities. The sell-off was most prominent on the Feb 2020 bond with the yield up +17bps to 13.68%. The yields on the 5yr, 7yr and 10yr benchmark bonds increased by +6bps, +5bps and +11bps to 13.29%, 13.35% and 13.39% respectively.

·         In the coming week, we expect market activities to be influenced by system liquidity, with N64billion worth of OMO bills maturing on Thursday, and foreign investor participation.

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