Daily Market Wrap

Tuesday, July 28, 2020

By FSDH Research

Market Insight– The Nigerian equities market reversed its direction and closed in the red today. Both, the All-Share Index and the NSE-30 Index traded lower with All-Share Index (ASI) YTD return settling at -8.17% percent. Major sector indices showed a divergence. The Oil & Gas (-5.20 percent) sector was prominent loser followed by the losses in Banking (-0.45 percent) and Consumer Goods (-0.13 percent) sectors. On the other hand, the Insurance (+0.43 percent) sector recorded gains, while the Industrial sector remained unchanged. The markets may remain volatile in the near term. We advise investors to accumulate quality stocks at lower levels with a long term investment horizon.

Market Brief

  • The Nigerian equity market closed on a negative note today, as All Share Index decreased by 0.54 percent to close at 24,650.16 points.
  • The market cap of equities listed on the NSE declined to ₦12.859 trillion from ₦12.929 trillion
  • Market breadth was negative with 14 gainers as against 17 losers.

NSE 30

  • The NSE 30 Index decreased by 0.66 percent
  • Okomu Oil Palm Plc and Zenith Bank were the key gainers, while Total Nigeria and Seplat Petroleum were the key losers

Money Markets

  • The Overnight (O/N) rate increased by 0.13 percent to close at 2.00 percent
  • The Open Buy Back (OBB) rate also increased by 0.21 percent to close at 1.33 percent

We expect money market rates to remain at subdued levels with no significant funding pressure by market participants.


I&E FX window observed relatively subdued volume passing through the market, as it remains affected by tightened system liquidity. Naira weakened by 0.06 percent as the dollar was quoted at ₦389.50 as compared to ₦389.25 on the previous day. Most participants maintained bids between ₦380.00 and ₦390.00 per dollar.

Treasury Bills

  • NT-bills market closed on a flat note with average yield across the curve remaining unchanged at 1.75 percent.

Tomorrow, the CBN is scheduled to conduct a Primary Market Auction to roll over NT-bills maturities worth ₦265.95 billion across 91-day (₦49.84 billion), 182-day (₦54.59 billion), and 364-day (₦161.52 billion) tenors.

  • In the OMO bills market, average yield across the curve declined by 4 bps to close at 4.44 percent as against the last close of 4.48 percent.

The CBN has not conducted an OMO bills auction in the last few weeks (last OMO auction was held on July 2) as there was liquidity squeeze in the market. Furthermore, there is a possibility that the CBN may want to keep OMO rates at current levels and in fact, could be inclined to see a further decline in rates.

Bond Markets

  • The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 15 bps to close at 4.01 percent

On July 27, Nova Merchant Bank Limited announced the successful issuance of ₦10.0 billion seven-year subordinated unsecured bonds under its ₦50 billion Debt Issuance Programme. Although it was NOVA’s first bond issuance in the debt market, the bond issue was oversubscribed by 300 percent. The offer opened on June 30, and closed on July 8, with the effective yield on bonds guided in the range of 12.00 to 12.50 percent. It is worth noting that, the bond issuance witnessed demand from diversified investors despite volatility in markets due to COVID-19 pandemic. The successful bond issuance places the Bank on a firm footing to achieve its short-term and long-term goals.

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