Daily Market Wrap

Monday, 7 September, 2020

The Nigerian equity market closed on a negative note today as All Share Index decreased by 0.09 percent to close at 25,582.23 points. The market cap of equities listed on the NSE declined to ₦13.346 trillion from ₦13.358 trillion as on the previous day. The total volume traded closed with an exchange of 254.974 million units valued at ₦2.00 billion traded in 4,699 deals. The market breadth was positive with 16 gainers as against 15 losers.

The NSE 30 Index decreased by 0.12 percent to close at 1,087.39 points as against 1,088.70 points as on the previous day. Market turnover closed with traded volume of 194.63 million units. Access Bank and FCMB Group Plc were the key gainers, while Dangote Sugar and Guaranty Trust Bank were the key losers.

As of September 7, the Overnight (O/N) rate remained unchanged at 2.25 percent, while the Open Buy Back (OBB) rate declined by 0.25 percent to close at 1.38 percent from 1.63 percent on the previous day. The money market rates are expected to remain subdued as inflows from OMO bills maturities worth ₦265.00 billion would hit the system later in the week.

FX: At the I&E FX market, Naira appreciated by 0.03 percent as the dollar was quoted at ₦386.00 as compared to ₦386.13 on the previous day. Most participants maintained bids between ₦380.00 and ₦395.13 per dollar. Moreover, Nigeria’s FX reserves grew slightly last week, despite the CBN’s interventions across the various FX windows. FX reserves increased by $38.50 million to $35.70 billion as of September 4, 2020.

NT-Bills market closed on a negative note with average yield across the curve increasing by 6 bps to close at 1.97 percent from 1.91 percent on the previous day. The average yield across short-term maturities widened by 24 bps, while the average yield across medium-term maturities declined by 8 bps and the average yield across long-term maturities remained unchanged at 2.66 percent. Maximum selling pressure was witnessed in the NTB 26-Nov-20 (+58 bps), NTB 29-Oct-20 (+48 bps), and NTB 12-Nov-20 (+36 bps) maturity bills.

In the OMO bills market, the average yield across the curve declined by 6 bps to close at 2.75 percent as against the last close of 2.81 percent. Buying interest was witnessed across medium-term and long-term maturities with the average yield falling by 14 bps and 13 bps, respectively, while selling pressure was seen across short-term maturities with the average yield rising by 6 bps. Yields on 8 bills declined with the 23-Feb-21 maturity bill registering the highest yield decline of 74 bps, while yields on 3 bills advanced with the 17-Sep-20 maturity bill recording the highest yield increase of 38 bps.

Going into this week, we expect the downward trend in OMO bills yields to continue on the back of buoyant system liquidity. In the NT-Bills segment, we expect the focus to shift to the Primary Market Auction, which is scheduled on September 9, where the CBN will rollover bills worth ₦128.06 billion across three tenors.

The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 6 bps to close at 4.69 percent from 4.75 percent on the previous day. Average yields across short, medium, and long tenor of the curve declined by 3 bps, 20 bps, and 11 bps, respectively. The 17-MAR-2027 maturity bond was the best performer with a decline in yield of 39 bps, while the FGNSB 12-DEC-2020 bond was the worst performer with an increase in yield of 49 bps.

The DMO has issued a circular of FGN Savings bond for September 2020. The offer commenced today and will close on September 11. The 2-year (due on September 16, 2022) and 3-year (due on September 16, 2023) FGN Savings bonds are being offered at the coupon rates of 3.501 percent and 4.501 percent, respectively. The settlement of the bond will take place on September 16, 2020.

By FSDH Research

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