Monday, August 24, 2020
Market Insight– The Nigerian equities market started the week on a positive note 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 -6.01 percent. On the sectoral front, key sector indices showed a mixed performance. The Insurance (+0.82 percent) and Consumer Goods (+0.7 percent) sectors recorded gains, while the Industrial (-0.01 percent) and Banking (-0.1 percent) sectors ended lower. Oil and Gas 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 0.03 percent to close at 25,229.12 points.
- The market cap of equities listed on the NSE increased to ₦13.162 trillion from ₦13.158 trillion
- The market breadth was neutral with 15 gainers as against 15 losers.
NSE 30
- The NSE 30 Index increased by 0.03 percent
- Unilever Nigeria and International Breweries were the key gainers, while Presco and Lafarge Africa Plc were the key losers.
Money Markets
- The Overnight (O/N) rate increased by 0.38 percent to close at 3.00 percent
- The Open Buy Back (OBB) rate remained unchanged at 2.00 percent.
We expect money market rates to remain at current subdued levels as OMO maturities worth ₦283.42 billion and FGN bond coupon payment worth ₦49.89 billion are expected to improve the system liquidity.
FX
Last week, the CBN’s FX reserves fell by $12.29 million to $35.61 billion as FX outflows continue to outpace inflows. FX reserves have consistently declined since May 2020. At the I&E FX Window, Naira closed flat at ₦386.00 per dollar. Most participants maintained bids between ₦384 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 the OMO bills market, the average yield across the curve declined by 14 bps to close at 3.45 percent
At the OMO auction held on August 21, the CBN sold bills worth ₦72.50 billion across the 96-day (₦7.50 billion), 180-day (₦15.00 billion), and 355-day (₦50.00 billion) tenors at stop rates of 4.90 percent (-2 bps), 7.71 percent (-3 bps), and 8.94 percent, respectively. The CBN sold only 90.63 percent of the total amount offered (₦80.00 billion) across three tenors.
Bond Market
- The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 3 bps to close at 4.78 percent
Transport Services Limited (TSL) SPV Plc has started offering its Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds (10-year) with a target size up to ₦12 billion under ₦50 billion bond issuance programme. Offer started on August 21 and would close on August 28 with a settlement on September 9, 2020. The company has provided the Book Building price guidance between 9.00-9.50 percent. The issue has assigned a rating of AAA by Agusto and AAA by DataPro.
By FSDH Research
For full report click on the link below:https://tinyurl.com/MarketWrapAug24