Daily Market Wrap

Thursday, September 3, 2020

The Nigerian equity market closed on a positive note today as All Share Index increased by 0.20 percent to close at 25,511.02 points. The market cap of equities listed on the NSE increased to ₦13.309 trillion from ₦13.282 trillion as on the previous day. The total volume traded closed with an exchange of 232.416 million units valued at ₦1.32 billion traded in 3,377 deals. The market breadth was positive with 19 gainers as against 6 losers.

The NSE 30 Index increased by 0.20 percent to close at 1,084.22 points as against 1,082.08 points as on the previous day. Market turnover closed with traded volume of 98.94 million units. FCMB Group Plc and Zenith Bank were the key gainers, while Sterling Bank and Fidelity Bank Plc were the only losers.

As of September 3, the Overnight (O/N) rate declined by 2.08 percent to close at 3.25 percent as against 5.33 percent, and the Open Buy Back (OBB) rate also declined by 2.17 percent to close at 2.50 percent from 4.67 percent on the previous day. With the current levels of buoyant system liquidity, we expect the money market rates to stay around at low levels, barring any significant funding pressures on market participants.

FX: At the I&E FX market, Naira weakened by 0.06 percent as the dollar was quoted at ₦386.25 as compared to ₦386.00 on the previous day. Most participants maintained bids between ₦380.00 and ₦395.13 per dollar.

NT-Bills market closed on a negative note with average yield across the curve increasing by 4 bps to close at 2.13 percent from 2.09 percent on the previous day. The average yield across medium-term maturities widened by 17 bps, while average yields across short-term and long-term maturities remained unchanged at 1.22 percent and 3.18 percent, respectively. Selling pressure was witnessed in the NTB 11-Feb-21 (+79 bps) and NTB 28-Jan-21 (+29 bps) maturity bills, while buying interest was seen only in the NTB 14-Jan-21 maturity bill with a decline in yield of 21 bps.

In the OMO bills market, the average yield across the curve declined by 15 bps to close at 2.77 percent as against the last close of 2.92 percent. Buying interest was witnessed across short-term and medium-term maturities with average yields falling by 28 bps and 10 bps, respectively. However, the average yield across long-term maturities increased by 2 bps. Yields on 9 bills declined with the 10-Sep-20 maturity bill registering the highest yield decline of 188 bps, while yields on 5 bills advanced with the 24-Nov-20 maturity bill recording the highest yield increase of 103 bps.

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 4.95 percent from 4.94 percent on the previous day. Average yields across medium and long tenor of the curve widened by 1 basis point and 11 bps, respectively, while the average yield across short tenor of the curve remained unchanged. The 23-FEB-2028 maturity bond was the best performer with a decline in yield of 23 bps, while the 27-MAR-2050 maturity bond was the worst performer with an increase in yield of 24 bps.

On August 28, S&P Global Ratings affirmed its ‘B-‘ (long-term) and ‘B’ (short-term) sovereign credit ratings for Nigeria. The outlook remains stable. The stable outlook reflects that funding from official lenders will partially ease pressures on FX reserves and support commercial debt-repayment capacity over the next 12 months, despite the weakening in economic, fiscal, and external performance due to Covid-19 pandemic.

By FSDH Research
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