Daily Market Wrap

Friday, 11 September 2020

The Nigerian equity market closed on a positive note today as All Share Index increased by 0.28 percent to close at 25,591.95 points. The market cap of equities listed on the NSE increased to ₦13.351 trillion from ₦13.315 trillion as on the previous day. The total volume traded closed with an exchange of 212.733 million units valued at ₦2.28 billion traded in 3,239 deals. The market breadth was positive with 19 gainers as against 18 losers.

The NSE 30 Index increased by 0.24 percent to close at 1,086.63 points as against 1,084.07 points as on the previous day. Market turnover closed with traded volume of 145.97 million units. Lafarge Africa and Stanbic IBTC were the key gainers, while Julius Berger and International Breweries were the key losers.

As of September 11, the Overnight (O/N) rate increased by 14.30 percent to close 16.50 percent as against the last close of 2.20 percent, and the Open Buy Back (OBB) rate also increased by 13.10 percent to close at 14.50 percent from 1.40 percent on the previous day. The money market rates spiked by an average of 1370 bps following FX retail auction by the CBN.

FX: At the I&E FX market, Naira appreciated by 0.04 percent as the dollar was quoted at ₦386.00 as compared to ₦386.17 on the previous day. Most participants maintained bids between ₦380.00 and ₦394.13 per dollar. Yesterday, President Muhammadu Buhari directed the CBN not to provide FX for the importation of food items or fertilizer.

NT-Bills market closed on a positive note with average yield across the curve declining by 11 bps to close at 1.72 percent from 1.83 percent on the previous day. The average yield across long-term maturities was compressed by 42 bps, while average yields across short-term and medium-term maturities remained unchanged. Maximum buying interest was seen in the NTB 26-Aug-21 (-42 bps), NTB 29-Jul-21 (-35 bps), and NTB 15-Jul-21 (-32 bps) maturity bills.

In the OMO bills market, the average yield across the curve declined by 8 bps to close at 2.41 percent as against the last close of 2.49 percent. Buying interest was witnessed across short-term and long-term maturities with average yields falling by 8 bps and 6 bps, respectively. However, the average yield across medium-term maturities remained unchanged. Yields on 6 bills declined with the 10-Aug-21 maturity bill registering the highest yield decline of 67 bps, while yields on 24 bills remained unchanged. The CBN conducted an OMO auction on September 10, selling bills worth ₦70 billion across the 75-day (₦10 billion), 180-day (₦10 billion), and 355-day (₦50 billion) tenors. The stop rate for 355-day tenor cleared lower at 8.90 percent (-4 bps), while the stop rates for 75-day and 180-day tenors closed flat at 4.86 percent and 7.68 percent, respectively. The auction was significantly oversubscribed by 210 percent with bid-to-cover ratios settling at 1.20x (75-day), 3.53x (180-day), 3.39x (355-day).

The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 10 bps to close at 4.12 percent from 4.22 percent on the previous day. Average yields across short, medium, and long tenor of the curve declined by 12 bps, 1 basis point, and 14 bps, respectively. The 14-MAR-2024 maturity bond was the best performer with a decline in yield of 68 bps, while the 22-JAN-2026 maturity bond was the worst performer with an increase in yield of 2 bps.

As of June 30, 2020, the FGN’s domestic debt stock increased to ₦15.46 trillion, equivalent to 10.7 percent of 2019 GDP. The total rose by ₦930 billion in the quarter, including the stock of FGN bonds worth ₦680 billion. The DMO has enhanced its sales of the bonds at monthly auction, having been authorized to raise ₦1.59 trillion in 2020 solely from the domestic market rather than from a combination of external and domestic markets. Over the quarter there were also increases in the stock of Sukuk and NT-Bills of ₦160 billion and ₦110 billion respectively.

By FSDH Research

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