Daily Market Wrap

Thursday, August 6, 2020

Market Insights-The Nigerian equities market sustained its bullish streak for the fifth consecutive trading session. Both the All-Share Index and the NSE-30 Index closed in the green with All-Share Index (ASI) YTD return settling at -7.12 percent. On the sectoral front, key sector indices showed a mixed performance. The Oil & Gas (+4.36 percent), Banking (+0.14 percent), and Consumer Goods (+0.09 percent) sectors recorded gains, while the Industrial (-0.67 percent) and Insurance (-0.02 percent) sectors ended lower. The markets may remain volatile in the near term. We advise investors to acquire quality stocks with a long term investment horizon.

Market Brief

  • The Nigerian equity market closed on a positive note today as All Share Index increased by 0.19 percent to close at 24,930.34 points.
  • The market cap of equities listed on the NSE increased to ₦13.005 trillion from ₦12.980 trillion
  • Market breadth was positive with 20 gainers as against 10 losers.

NSE 30

  • The NSE 30 Index increased by 0.21 percent
  • Seplat Petroleum and STANBIC IBTC Bank were the key gainers, while UBN and BUA Cement Plc were the key losers.

Money Markets

  • The Overnight (O/N) rate declined by 0.69 percent to close at 8.64 percent
  • The Open Buy Back (OBB) rate also declined by 0.50 percent to close at 8.00 percent

The money market rates declined marginally, although system liquidity remained lower. We expect the money market rates to remain at current levels in the absence of any inflows tomorrow.


In July 2020, the volume of dollars traded in the Investors and Exporters (I&E) FX window fell by 6 percent to $937.27 million from $992.12 million in June 2020. Naira appreciated by 0.96 percent as the dollar was quoted at ₦385.50 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 1.70 percent.

We expect muted investor sentiment to persist in the NT-bills secondary market as investors’ participation remains moderate due to strained system liquidity.

The OMO bills market closed on a positive note with average yield across the curve declining by 4 bps to close at 3.92 percent

Bond Markets

  • The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 53 bps to close at 4.07 percent

Recently, the attention of the DMO has been drawn on the subject of loans obtained from China. As of March 31, 2020, the total borrowing from China stands at $3.121 billion, which accounts for 3.94 percent of Nigeria’s Total Public Debt of $79.303 billion. Moreover, loans from China accounted for 11.28 percent of the External Debt Stock of $27.67 billion. Hence, China is not a major source of funding for Nigeria. The borrowings from China are concessional loans with interest rates of 2.50%, with the tenor of 20 years and a moratorium of 7 years. Furthermore, the borrowing cost also gets lowered due to the low-interest rate while the long tenor enables the repayment of the principal sum of the loans over a longer period of time.

Culled from FSDH Research

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