Nigerian equities market printed in positive territories, gains +0.38%

February 20, 2018/InvestmentOne Report

Please click to download the Market Report for Tuesday 20^th  February 2018

EQUITIES:

·         The Nigerian equities market printed in positive territories in today’s trading session, gaining +0.38%.

·         Market performance was largely driven by the buy interest in DANGCEM (+413pts), NESTLE (+84pts), UBA (+19pts) and PZ (+12pts) which neutralized the losses in FBNH (-85pts) and INTBREW (-71pts)

·         With the exception of the Industrial (+1.58%), which closed in the green, all other major sectors closed down. Consumer Goods (-0.07%), Banking (-1.03%) and Oil & Gas (-1.31%) all closed negative in today’s trading session.

·         Market breadth index, a measure of investor sentiments, ended negative (-0.17x) as 37 stocks declined compared to 18 stocks that gained. PZ (+5.00%) was the top gainer while CONOIL (-9.67%) had the worst performance.

·         There was an improvement in market activity today as total volume and value rose by c.+78% and c.+103% respectively, as investors exchanged 510million units of shares worth N4.63billion. The most actively traded stock was FBNH (-7.26%) with c.115million units of shares worth c.N1.25billion.

·         In the near term, we expect the market to trade sideways 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 NGN gained +0.01% and +1.27% against USD and EUR respectively to close at N360.25 and N444.50, while it lost -0.12% against the GBP to close at N504.19.

·         While NGN gained +0.27% and +0.40% against the USD and GBP to close at  N362 and N500 respectively, it closed flat at N445 against the EUR in the parallel market.

·         In the near term, we expect CBN’s intervention sales to continue to support the Naira in the FX market.   

FIXED INCOME:

·         The Overnight and Open Buy Back rates shed -583bps and -675bps to close at 19.33% and 19.92% respectively. The fall in money market rates may not be unconnected with the absence of OMO auctions which has reduced the pressure on system liquidity.

·         However, NIBOR rates increased today as 1-month, 3-month and 6-month rose by +14bps, +37bps and +58bps to close at 15.49%, 16.32% and 18.46% respectively.

·         The bond market was somewhat flat today as yields remained unchanged across most tenors. While the yields on the 7-yr and 10-yr benchmark bonds closed flat at 13.68% and 13.71% respectively, the yield on the 5-yr benchmark bond shed -4bps to close at 13.54%.

·         There will be bond auction tomorrow where DMO will offer N45bn each of the 5-yr bond and the new issue of 10-yr bond.

·         In the near term, we expect market activity to be influenced by foreign investor participation and liquidity levels with N56billion worth of OMO bills maturing on Thursday.

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