January 29, 2018/InvestmentOne Research

Please click to download the Market Report for Monday 29^th January 2018

EQUITIES:

·         The Nigeria equities market closed the first trading day of the week in the green, following the gains in  DANGCEM (+390pts), FBNH (+38pts), UBN (+29pts), STANBIC (+28pts) and FIDELITY (+28pts) which more than outweighed the sell pressure in NB (-40pts), DANGSUGAR (-34pts) and GUARANTY (-25pts).

·         As a result, the NSE-ASI gained +1.22% to close at 44,306.48pts, bringing market capitalization to N15.88trillion.

·         Market breadth index ended positive (+0.30x) as 41 stocks gained against 12 stocks that declined. DIAMONDBNK (+9.85%) was the best performer while DANGSUGAR (-4.56%) led the laggards’ chart.

·         Industrial (+1.73%) had the best performance in today’s trading session. While Banking (+0.87%) and Oil & Gas (+0.28%) also closed positive, Consumer Goods (-0.67%) ended in the red.

·         Compared to last Friday, total volume  and total value decline by -39% and -17% respectively, as investors exchanged c.573million units of shares worth of N5.88billion. FCMB (+5.88%) was the most actively traded stock with c.169million units of shares worth c.N547million.

·         The equities market appears to be gearing up for another rally with a positive close for the second consecutive trading session. This may not be unconnected with investors positioning ahead of earnings season commencing later this quarter. Nonetheless, we believe there may be profit taking in the market, which could present entry opportunities into our quality names for investors with a medium to longer term horizon.

CURRENCY:

·         While the NGN remained unchanged against the USD at N360.37, it, however, shed -0.99% and -0.22% to close at N510/GBP and N446/EUR in the IEFX window.

·         At the parallel market, the NGN shed -0.01%, -0.57% and -0.40% against the USD,GBP and EUR to close at N364/USD, N506.50/GBP and N444.74/EUR.

·         Today, the CBN sold US$210m today as it continues to intervene in the FX market to provide support for the NGN.

·         Going forward, we expect the NGN to continue to see support from CBN’s intervention sales in the FX market.  

FIXED INCOME:

·         Money market rates increased today as the Open Buy Back and Overnight rate rose by +133bps and +125bps to close at 5.83% and 6.58% respectively. This may not be unconnected with the CBN’s OMO auction conducted today.

·         Although, the CBN offered to sell N50bn worth of the 87-day bill and N100bn worth of the 248-day bill today, the 87-day bill ended as a no-sale while N84.30bn was subscribed for out of the N100bn worth of the 248-day bill that was offered by the Apex bank at a stop rate of 14.40%.

·         Although the bond market was bullish at the shorter end of the curve, it was however bearish at the longer end of the curve. While the 5yr benchmark bond rose by +7bps to close at 13.17%, the 7yr and 10yr benchmark bonds declined by -7bps and -2bps to close at 13.38% and 13.40% respectively.

·         Going forward, we expect activity level to be influenced by liquidity levels as well as  foreign investor participation.  

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