Thursday, August 27, 2020.
Market Insight– The Nigerian equities market reversed its trend 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 Industrial (-0.37 percent) and Banking (-0.33 percent) sectors recorded losses, while the Insurance (+0.64 percent) and Consumer Goods (+0.52 percent) sectors ended higher. The Oil and 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 0.10 percent to close at 25,304.25 points.
- The market cap of equities listed on the NSE declined to ₦13.201 trillion from ₦13.214 trillion
- The market breadth was negative with 11 gainers as against 19 losers.
NSE 30
- The NSE 30 Index decreased by 0.13 percent
- Nigerian Breweries and FCMB Group Plc were the key gainers, while Access Bank and Lafarge Africa Plc were the key losers.
Money Markets
- The Overnight (O/N) rate declined by 0.38 percent to close at 2.00 percent
- The Open Buy Back (OBB) rate also declined by 0.25 percent to close at 1.50 percent
FX
I&E FX window observed lower volume passing through the market due to tightened system liquidity. Naira appreciated marginally by 0.06 percent as the dollar was quoted at ₦385.75 as against the last close of ₦386.00 per dollar. Most participants maintained bids between ₦386.00 and ₦383.00 per dollar.
Treasury Bills
- NT-Bills market closed on a positive note with average yield across the curve declining by 7 bps to close at 1.44 percent
At the Primary Market Auction held on August 26, the CBN sold NT-Bills worth ₦198.00 billion across the 91-day (₦20.40 billion), 182-day (₦55.90 billion), and 364-day (₦121.70 billion) tenors. The stop rates for the 91-day tenor cleared lower at 1.150 percent (-5 bps), while the stop rates for the 182-day and 364-day tenor stood higher at 1.800 percent (+41 bps) and 3.340 percent (+14 bps), respectively. The auction was oversubscribed by 13 percent, with bid-to-cover ratios settling at 1.53x (91-day), 1.78x (182-day), and 0.93x (364-day).
- In the OMO bills market, the average yield across the curve declined by 11 bps to close at 3.08 percent
Bond Markets
- 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 4.79 percent
According to the June 2020 report of Pension regulator, the PFA’s Assets Under Management (AUM) comprises of FGN debt securities, which accounted for approximately 66.1 percent of the total assets. The PFA’s holding in FGN bonds was around 56.9 percent of total AUM, while the share of NT-bills was 9.2 percent. The Share of NT-bills drastically declined by 11.57 percent YoY as a result of the crashing of yields in the fourth quarter of 2019. The reduction in holdings of NT-bills has been balanced by increased exposure to FGN bonds, commercial papers, and corporate bonds.
By FSDH Research
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