February 8, 2018/InvestmentOne Report

Please click to download the Market Report for Thursday 8^th February 2018

EQUITIES:

·         The equities market closed in the red today, losing -0.49% to end at 43,326.89pts.

·         Today’s performance was largely driven by the sell-off in NESTLE (-165pts), NB (-105pts), FBNH (-20pts) and UBN (-16pts), which more than offset the gains in DANGCEM (+49pts), UBA (+15pts) and INTBREW (+14pts).

·         Also, sector performances were mixed with Oil & Gas (+0.61%) being the best performer. Industrial (+0.26%) also closed in the green while Banking (-0.11%) and Consumer Goods (-1.98%) printed in the red.

·         Market breadth index also ended negative (-0.09x) as 26 stocks declined compared to 17 stocks that gained. UNITYBNK (+9.38%) was the market’s best performer while SKYEBANK (-8.93%) led the losers’ chart.

·         Market activity improved with total volume and total value up by +337% and +64% respectively as investors exchanged c.2.2billion units of shares worth N7.50billion. STERLNBANK (+4.69%) was the most actively traded stocks with c.1.74billion units of shares worth c.N3.83billion.

·         Going forward, we expect the market to trade sideways even as investors continue to take positions in this earnings season. Despite the sell-off we saw in the market recently, we believe this may present entry opportunities into our quality names for investors with a medium to longer term horizon.  

CURRENCY:

·         At the IEFX window, the Naira lost -0.87% and -0.05% to close at 502.59/GBP and 360.40/USD respectively. However, it gained +0.04% against the EUR to close at N441.00.

·         While the NGN was flat at N363/USD and N446/EUR, it gained +0.79% against the EUR to close at N446 at the parallel market.

·         In the near term, we expect the CBN’s FX intervention sales, on the back of stability in domestic oil production levels, to continue to support the Naira despite the decline in global oil prices. 

FIXED INCOME:

·         Money market rates fell today as Open Buy Back and Overnight rates shed -633bps and -508bps to close at 46.67% and 48.00% respectively. This may not be unconnected with the improvement in system liquidity as N68billion worth of OMO bills hit the system today.

·         At the OMO action today, CBN sold N120million worth of the 98-day bills and N23.3billion worth of the 252-day bills at respective stop rates of 12.60% and 14.40%.

·         The bond market was largely bullish today with yields decline across most maturities. The yields on the 5-yr and 7-yr benchmark bonds fell by -4bps and -11bps to close at 13.54% and 13.60% respectively, while the yield on the 10-yr benchmark bond was somewhat flat at 13.68%.

·         Going forward, we expect market activities to be influenced by foreign investor participation and liquidity levels.  

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