Daily Market Wrap

Friday, August 21, 2020

Market Insight– The Nigerian equities market maintained its upward trend 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 -6.04 percent. On the sectoral front, key sector indices showed a mixed performance. The Insurance (+0.39 percent), Consumer Goods (+1.06 percent), and Oil & Gas (+0.43 percent) sectors recorded gains, while the Banking (-0.46 percent) sector ended lower. The Industrial 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 positive note today as All Share Index increased by 0.07 percent to close at 25,221.87 points.
  • The market cap of equities listed on the NSE increased to ₦13.158 trillion from ₦13.149 trillion
  • The market breadth was positive with 20 gainers as against 12 losers.

NSE 30

  • The NSE 30 Index increased by 0.04 percent
  • International Breweries and Nigerian Breweries were the key gainers, while Okomu Oil Palm Plc and Fidelity Bank Plc were the key losers.

Money Markets

  • The Overnight (O/N) rate declined by 3.68 percent to close at 2.63 percent
  • The Open Buy Back (OBB) rate also declined by 3.60 percent to close at 2.00 percent

We expect the money market rates to remain at current levels, barring any significant funding pressure by the market participants.

FX

Yesterday, the volume of dollars traded in the Investors and Exporters (I&E) FX window fell to $ 30.31 million due to persistent dollar shortages resulting from low inflows from oil and remittances. Naira closed flat at ₦386.00 per dollar. Most participants maintained bids between ₦381.37 and ₦386.00 per dollar.

Treasury Bills

  • NT-Bills market closed on a flat note with average yield across the curve remaining unchanged at 1.54 percent. In spite of a buoyant system liquidly in the market, the NT-bills market was quiet compared to yesterday’s trading session.

In the OMO bills market, the average yield across the curve declined by 16 bps to close at 3.59 percent

Bond Markets

  • The FGN bond market closed on a negative note today, as the average bond yield across the curve cleared higher by 5 bps to close at 4.81 percent

At FGN Saving Bond Auction for August 2020, the DMO allotted bonds worth ₦517.924 million across the 2-year (₦137.375 million) and 3-year (₦380.549 million) tenors at coupon rates of 3.610 percent (-52 bps) and 4.610 percent (-52 bps), respectively. Allotment for 2-year bond increased by 75 percent to ₦137.375 million from ₦78.672 million allotted in the last auction and allotment for 3-year bond increased by 84 percent to ₦380.549 million from ₦206.307 million allotted in the previous auction. Savings bond auction was halted for four months since April 2020 due to the COVID-19 pandemic.

By FSDH Research

For the full report click on the link below:

https://tinyurl.com/MarketWrapAug21