Tuesday, August 11, 2020
Market Insight – Negative sentiment continued in the Nigerian equities market as both the All-Share Index and the NSE-30 Index traded lower today with the All-Share Index (ASI) YTD return settling at -7.30 percent. On the sectoral front, key sector indices showed a mixed performance. The Insurance (-2.48 percent) and Industrial (-2.16 percent) sectors ended lower, while the Consumer Goods (+0.93 percent), Banking (+0.52 percent), and Oil & Gas (+0.26 percent) sectors recorded gains. 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 negative note today as All Share Index decreased by 0.58 percent to close at 24,883.70 points.
- The market cap of equities listed on the NSE declined to ₦12.981 trillion from ₦13.056 trillion
- The market breadth was neutral with 17 gainers as against 17 losers
NSE 30
- The NSE 30 Index decreased by 0.68 percent
- Nigerian Breweries and Eco Bank Transnational Inc (ETI) were the key gainers, while Dangote Cement and Guinness Nigeria were the key losers
Money Markets
- The Overnight (O/N) rate increased marginally by 0.04 percent to close at 6.17 percent
- The Open Buy Back (OBB) rate declined by 0.08 percent to close at 5.17 percent
The money market rates are anticipated to remain in the single-digit territory due to slight improvement in the system liquidity.
FX
The I&E FX market remained suppressed due to tight liquidity conditions. Naira remained stable at ₦385.50 per dollar. Most participants maintained bids between ₦384.00 and ₦386.00 per dollar.
Treasury Bills
- NT-Bills market closed on a flat note with average yield across the curve remaining unchanged at 1.71 percent.
The trading activities in the NT-Bills space stayed calm as market participants shifted their focus towards the Primary Market Auction scheduled tomorrow.
- The OMO bills market closed on a negative note with average yield across the curve increasing by 19 bps to close at 4.23 percent
The liquidity conditions are expected to improve this week due to the maturities of NT-bills and OMO bills worth ₦56.78 billion and ₦29.78 billion, respectively. Tomorrow, the CBN is expected to offer the NT-bills worth ₦56.78 billion across 91-day (₦19.78 billion), 182-day (₦10.00 billion), and 364-day (₦27.00 billion) tenors through Primary Market Auction. In addition, following the five weeks of non-issuance of new OMO bills, we expect the CBN to conduct an OMO auction later this week.
Bond Markets
- The FGN bond market closed on a negative note today, as the average bond yield across the curve cleared higher by 29 bps to close at 4.35 percent
The DMO has resumed its FGN Savings bond effective from August 2020. The offer has commenced on August 10 and will close on August 14. The 2-year (due on August 19, 2022) and 3-year (due on August 19, 2023) FGN Savings bonds are being offered at the coupon rates of 3.61 percent and 4.61 percent, respectively. The settlement of the bond will take place on August 19, 2020.
Culled from FSDH research
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