Wednesday, August 19, 2020
Market Insight– The Nigerian equities market traded higher today with both the All-Share Index and the NSE-30 Index closing in the green. Moreover, the All-Share Index (ASI) YTD return settled at -6.22 percent. On the sectoral front, key sector indices showed a mixed performance. The Banking (+0.81 percent), Insurance (+0.41 percent) and Consumer Goods (+0.19 percent) sectors recorded gains, while the Industrial (-0.04 percent) sector ended lower. 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.
- The Nigerian equity market closed on a positive note today as All Share Index increased by 0.14 percent to close at 25,171.32 points.
- The market cap of equities listed on the NSE increased to ₦13.131 trillion from ₦13.113 trillion
- The market breadth was neutral with 13 gainers as against 13 losers.
- The NSE 30 Index increased by 0.18 percent
- International Breweries and Guaranty Trust Bank were the key gainers, while Guinness Nigeria was the only loser today.
- The Overnight (O/N) rate declined by 2.50 percent to close at 13.50 percent
- The Open Buy Back (OBB) rate also declined by 2.25 percent to close at 13.00 percent
We expect the money market rates to decline slightly due to the low funding pressure on the market participants.
The CBN is planning to resume FX supply to BDCs (Bureau de Change) as international flights are expected to restart from August 29. The I&E FX Window has been experiencing currency shortages as FX sales to the BDC segment remain suspended. Naira depreciated marginally by 0.01 percent as the dollar was quoted at ₦386.00 as compared to ₦385.98 as on the previous day. Most participants maintained bids between ₦380.00 and ₦387.34 per dollar. We anticipate a surge in dollar demand, putting further pressure on the Naira, which has already been adjusted twice this year.
- NT-Bills market closed on a negative note with average yield across the curve increasing by 3 bps to close at 1.45 percent
- In the OMO bills market, average yield across the curve declined by 11 bps to close at 3.84 percent
- The FGN bond market closed on a negative note today, as the average bond yield across the curve cleared higher by 1 basis point to close at 4.67 percent
Today, the DMO conducted an FGN bond auction offering bonds worth ₦150 billion through re-opening of 10-year (₦25 billion), 15-year (₦40 billion), 25-year (₦45 billion), and 30-year (₦40 billion) tenors. The bond settlement will take place on August 21, 2020. Furthermore, we expect an increased activity in the secondary bond market, as unfilled bids at today’s Primary Market Auction to spur demand.
For the full report click on the below: