Naira closes flat N362/1$ at parallel market

February 21, 2018/InvestmentOne Report

Please click to download the Market Report for Wednesday 21^st February 2018

EQUITIES:

·         The Nigerian equities market closed somewhat flat in today’s trading session, gaining +0.02%.

·         The gains in the market today was largely driven by the buy interest in GUARANTY (+61pts), ZENITHBANK (+39pts), UBA (+38pts) and FBNH (+30pts) which more than offset the decline in NB (-77pts) and UBN (-28pts).

·         Most of the major sectors closed down today with the exception of Banking (+1.06%). Consumer Goods (-0.92%), Industrial (-0.89%) and Oil & Gas (-1.20%) all printed in the red.

·         Market breadth index was negative (-0.09x) as 30 stocks declined against 21 stocks that gained. JAPAULOIL (+5.71%) was the top performer while CONOIL (-9.58%) led the laggards’ chart.

·         Similar to yesterday, market activity improved as total volume and value increased by c.+12% and c.+15% respectively. Today, investors exchanged 570million units of shares worth N5.33billion. CUSTODIAN is the most actively traded stock with c.94million units of shares valued at c.N377million.

·         Going forward, 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 0.54% and +0.39% against GBP and EUR respectively to close at N501.50 and N442.77, while it lost -0.04% against the USD to close at N360.40. ·        

Please click to download the Market Report for Wednesday 21^st February 2018

EQUITIES:

·         The Nigerian equities market closed somewhat flat in today’s trading session, gaining +0.02%.

·         The gains in the market today was largely driven by the buy interest in GUARANTY (+61pts), ZENITHBANK (+39pts), UBA (+38pts) and FBNH (+30pts) which more than offset the decline in NB (-77pts) and UBN (-28pts).

·         Most of the major sectors closed down today with the exception of Banking (+1.06%). Consumer Goods (-0.92%), Industrial (-0.89%) and Oil & Gas (-1.20%) all printed in the red.

·         Market breadth index was negative (-0.09x) as 30 stocks declined against 21 stocks that gained. JAPAULOIL (+5.71%) was the top performer while CONOIL (-9.58%) led the laggards’ chart.

·         Similar to yesterday, market activity improved as total volume and value increased by c.+12% and c.+15% respectively. Today, investors exchanged 570million units of shares worth N5.33billion. CUSTODIAN is the most actively traded stock with c.94million units of shares valued at c.N377million.

·         Going forward, 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 0.54% and +0.39% against GBP and EUR respectively to close at N501.50 and N442.77, while it lost -0.04% against the USD to close at N360.40.

·         Naira closed flat at N362, N500 and N445 against USD, GBP and EUR respectively at 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 -733bps and -667bps to close at 12.00% and 13.25% 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.

·         The bond market was bearish today as yields increased across most tenors. While the yield on the 10-yr benchmark bond rose by +14bps  to close at 13.85%, the yields on the 5-yr and 7-yr  benchmark bonds closed flat at 13.55% and 13.68% respectively.

·         At the bond auction today, the DMO offered N45bn each of the 5-yr bond and the new issue of 10-yr bond at respective stop rates of 13.70% and 13.98%. It is pertinent to note that the stop rates were +32bps and +49bps respectively higher than the previous auction in January.

·         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 tomorrow.

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

, N500 and N445 against USD, GBP and EUR respectively at 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 -733bps and -667bps to close at 12.00% and 13.25% 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.

·         The bond market was bearish today as yields increased across most tenors. While the yield on the 10-yr benchmark bond rose by +14bps  to close at 13.85%, the yields on the 5-yr and 7-yr  benchmark bonds closed flat at 13.55% and 13.68% respectively.

·         At the bond auction today, the DMO offered N45bn each of the 5-yr bond and the new issue of 10-yr bond at respective stop rates of 13.70% and 13.98%. It is pertinent to note that the stop rates were +32bps and +49bps respectively higher than the previous auction in January.

·         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 tomorrow.

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