Wednesday, July 15, 2020
Market Insight: The overall Nigerian equity market reversed its direction and closed in green today with the All-Share Index trading marginally higher; although the NSE-30 Index recorded losses. On the sectoral front, key sector indices showed a mixed performance. The Banking (+0.37 percent) sector closed higher along with a minor gain in the Industrial sector (0.01 percent); while the Oil & Gas sector remained unchanged. On the other hand, the Consumer goods (-1.39 percent) and Insurance (-0.89 percent) sectors settled lower. We advise investors to buy quality stocks with a long term investment horizon.
Market Brief
- The Nigerian equity market closed on a positive note today, as All Share Index marginally increased by 0.06 percent to close at 24,130.26 points.
- The market cap of equities listed on the NSE increased to ₦12.588 trillion from ₦12.580 trillion
- Market breadth was negative with 11 gainers as against 15 losers
NSE 30
- The NSE 30 Index decreased by 0.45 percent
- Dangote Sugar and Sterling Bank were the key gainers, while Julius Berger and Nigerian Breweries were the key losers.
Money Markets
- The Overnight (O/N) rate declined by 2.13 percent to close at 10.79 percent
- The Open Buy Back (OBB) rate also declined by 1.83 percent
FX
In the I&E FX market, trade volumes remained very low due to tightened liquidity. Naira weakened by 0.13 percent as the dollar was quoted at ₦386.50 as compared to ₦386.00 on the previous day. Most participants maintained bids between ₦380.00 and ₦391.49 per dollar.
On July 14, the CBN announced that the 274th meeting of the Monetary Policy Committee (MPC) is scheduled to be held on July 20, 2020.
Treasury Bills
- NT-bills market closed on a positive note today, with average yield across the curve declining by 1 basis point to close at 1.91 percent
- At the Primary Market Auction held today, the CBN offered NT-Bills worth ₦107.05 billion across 91-day (₦5.85 billion), 182-day (₦26.60 billion), and 364-day (₦74.60 billion) tenors.
In the OMO bills market, average yield across the curve increased by 6 bps to close at 5.73 percent
Bond Markets
- The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 1 basis point to close at 4.23 percent
During this week, the DMO is expected to release the FGN Bond issuance calendar for the third quarter of 2020, which could impact the market sentiment. Furthermore, FGN bond coupon payment worth ₦40.68 billion is expected to support the system liquidity. Hence, we expect the bullish sentiment to continue for the remaining part of the week.
Culled from FSDH Research