Daily Market Wrap

Tuesday, September 1, 2020

EQUITIES 

The Nigerian equity market closed on a positive note today as All Share Index increased by 0.34 percent to close at 25,413.95 points. The market cap of equities listed on the NSE increased to ₦13.258 trillion from ₦13.213 trillion as on the previous day. The total volume traded closed with an exchange of 1,073.834 million units valued at ₦2.10 billion traded in 3,221 deals. The market breadth was positive with 27 gainers as against 9 losers.

The NSE 30 Index increased by 0.36 percent to close at 1,079.57 points as against 1,075.71 points as on the previous day. Market turnover closed with traded volume of 90.75 million units.Eco Bank Transnational Inc (ETI) and Nigerian Breweries were the key gainers, while UBN and FCMB Group Plc were the key losers.

MONEY MARKET 

As of September 1, the Overnight (O/N) rate declined by 3.23 percent to close at 6.38 percent as against 9.61 percent, and the Open Buy Back (OBB) rate also declined by 3.35 percent to close at 5.75 percent from 9.10 percent on the previous day. The money market rates are likely to decline further as inflows from OMO bills maturities worth ₦321.48 billion expected to flow into the system, barring any significant liquidity mop-up activity by the CBN.

CardinalStone Partners Limited has completed its debut Commercial Paper issuance with a subscription level of 148 percent. The Company had set out to raise ₦5 billion in the first tranche under its ₦10 billion Commercial Paper Programme. However, subscriptions totalling ₦7.1 billion were received. The Series I (270-day) Commercial Paper was issued at an effective yield of 7.0 percent. The proceeds from the Commercial Paper Issuance would be used to diversify the financing mix and fund working capital requirements.

FX: 

The I&E FX market remained subdued due to tight liquidity conditions. Naira weakened by 0.09 percent as the dollar was quoted at ₦386.00 as compared to ₦385.67 on the previous day. Most participants maintained bids between ₦383.00 and ₦386.00 per dollar.

T-BILLS

NT-Bills market closed on a positive note with average yield across the curve declining by 3 bps to close at 2.09 percent from 2.12 percent on the previous day. The average yield across long-term maturities was compressed by 9 bps, while average yields across short-term and medium-term maturities remained unchanged. Maximum buying interest was seen in NTB 29-Jul-21 (-60 bps) maturity bills.

In the OMO bills market, the average yield across the curve declined by 11 bps to close at 2.99 percent as against the last close of 3.10 percent. Buying interest was witnessed across short-term, medium-term, and long-term maturities with average yields falling by 16 bps, 5 bps, and 11 bps, respectively. Yields on 14 bills declined with the 10-Nov-20 maturity bill registering the highest yield decline of 51 bps, while yields on 3 bills advanced with the 19-Jan-21 maturity bill recording the highest yield increase of 19 bps.

BONDS

The FGN bond market closed on a negative note today, as the average bond yield across the curve cleared higher by 16 bps to close at 4.90 percent from 4.74 percent on the previous day. The average yield across the short tenor of the curve widened by 23 bps, while average yields across the medium and long tenor of the curve declined by 4 bps and 3 bps, respectively.

The 27-MAR-2050 maturity bond was the best performer with a decline in yield of 23 bps, while the 27-JAN-2022 maturity bond was the worst performer with an increase in yield of 62 bps. With the anticipated improvement in the system liquidity later in the week, we expect increased trading activity in the secondary bond market.