Daily Market Wrap

Friday, August 14, 2020

Market Insight. The Nigerian equities market reversed its direction and closed in the red today with both the All-Share Index and the NSE-30 Index trading lower. On the sectoral front, key sector indices showed a mixed performance. The Consumer Goods (-0.68 percent), Insurance (-0.55 percent), and Banking (-0.19 percent) sectors recorded losses. The Industrial (+0.24 percent) sector ended higher, while the Oil & Gas sector remained unchanged. The markets may remain volatile in the near term. We advise investors to accumulate 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 0.15 percent to close at 25,199.84 points.
  • The market cap of equities listed on the NSE declined to ₦13.146 trillion from ₦13.165 trillion
  • The market breadth was negative with 11 gainers as against 23 losers.

NSE 30

  • The NSE 30 Index decreased by 0.15 percent
  • Sterling Bank and BUA Cement Plc were the key gainers, while International Breweries and Fidelity Bank Plc were the key losers today

Money Markets

  • The Overnight (O/N) rate increased by 16.01 percent to close at 19.80 percent
  • The Open Buy Back (OBB) rate also increased by 14.60 percent to close at 17.60 percent

The money market rates surged by an average of 1531 bps as the system liquidity was negatively impacted due to the FX retail auction and an OMO auction by the CBN.


In the I&E FX window, dollar supply improved by 92 percent on August 13 to record the total volume of $41.48 million. Naira depreciated marginally by 0.04 percent as the dollar was quoted at ₦386.00 as compared to ₦385.83 as on the previous day. Most participants maintained bids between ₦380.00 and ₦387.00 per dollar.

Treasury Bills

  • NT-Bills market closed on a positive note with average yield across the curve declining by 1 basis point to close at 1.58 percent
  • The OMO bills market closed on a positive note with average yield across the curve declining by 6 bps to close at 4.01 percent

Yesterday, the CBN conducted much anticipated OMO auction after the five weeks of non-issuance of new OMO bills. The bills worth ₦50.00 billion were offered across the 103-day (₦10.00 billion), 173-day (₦10.00 billion), and 362-day (₦30.00 billion) tenors. However, the CBN sold bills worth ₦45.36 billion (91 percent of the total offered amount) across the 103-day (₦5.56 billion), 173-day (₦9.80 billion), and 362-day (₦30.00 billion) tenors with the stop rates clearing lower at 4.92 percent (-3 bps), 7.74 percent (-5 bps), and 8.94 percent (-5 bps), respectively. Demand was skewed towards long tenor maturity bills with bid-to-cover ratio settling at 2.64x, while the 103-day and 173-day tenor bills witnessed an under-subscription with bid-to-cover ratios settling at 0.56x and 0.98x, respectively. However, the overall auction was oversubscribed, indicating a subscription level of 189 percent (₦94.44 billion).

Bond Market

  • 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 4.66 percent from 4.67 percent on the previous day.
  • Average yields across medium and long tenor of the curve declined by 5 bps and 1 basis point, respectively, while the average yield across short tenor of the curve remained unchanged.

Culled from FSDH Research

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