Daily Market Wrap

Tuesday, 15 September 2020

EQUITIES Nigerian equity market closed on a negative note today as All Share Index marginally decreased by 0.03 percent to close at 25,597.96 points. The market cap of equities listed on the NSE declined to ₦13.354 trillion from ₦13.358 trillion as on the previous day. The total volume traded closed with an exchange of 245.139 million units valued at ₦3.01 billion traded in 3,597 deals. The market breadth was negative with 13 gainers as against 15 losers.

The NSE 30 Index marginally decreased by 0.03 percent to close at 1,087.04 points as against 1,087.39 points as on the previous day. Market turnover closed with traded volume of 183.43 million units. Lafarge Africa and FCMB were the key gainers, while FBNH and Seplat were the key losers.

MONEY MARKET As of September 15, the Overnight (O/N) rate declined by 0.55 percent to close at 5.20 percent as against the last close of 5.75 percent, and the Open Buy Back (OBB) rate also declined by 0.60 percent to close at 4.40 percent from 5.00 percent on the previous day.
The National Bureau of Statistics (NBS) released its August 2020 inflation report, indicating an increase in the headline inflation by 40 bps to 13.22 percent from 12.82 percent recorded in July 2020. The rise in the headline inflation was primarily due to an increase in food inflation by 52 bps to 16.00 percent from 15.48 percent in July 2020. Moreover, Core inflation rose to 10.52 percent (+42 bps) as against 10.10 percent in July 2020.
FX: At the I&E FX market, Naira remained stable at ₦386.00 per dollar. Most participants maintained bids between ₦380.00 and ₦395.84 per dollar. We expect the pressure on Naira to reduce in the short term as the CBN continues to carry out measures aimed to stabilize and unify the exchange rate.

TREASURY BILLS NT-Bills market closed on a flat note with average yield across the curve remaining unchanged at 1.72 percent. The treasury bills market has been experiencing a low-yield environment since the CBN banned the sale of its OMO bills to local investors (except banks) in October 2019. This action has driven average NT-bills yield to under 2 percent, and average OMO bills yield to under 3 percent, despite a climbing inflation rate that has risen to 13.22 percent in August 2020.
In the OMO bills market, the average yield across the curve declined by 3 bps to close at 2.35 percent as against the last close of 2.38 percent. Buying interest was witnessed across medium-term and long-term maturities with average yields falling by 4 bps and 9 bps, respectively. However, the average yield across short-term maturities remained unchanged at 2.34 percent. The highest yield decline was witnessed in the 10-Aug-21 maturity bill, which fell by 33 bps, while the highest yield increase was seen in the 8-Jun-21 maturity bill, which rose by 1 basis point.

BONDS The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 2 bps to close at 4.05 percent from 4.07 percent on the previous day. Average yields across short, medium, and long tenor of the curve declined by 1 basis point, 4 bps, and 4 bps, respectively. The 22-JAN-2026 maturity bond was the best performer with a decline in yield of 15 bps, while the FGNSB 20-SEP-2020 bond was the worst performer with an increase in yield of 3 bps.
According to Domestic and Foreign Debt report by the National Bureau of Statistics (NBS), Nigeria’s total public debt portfolio stood at ₦31.01 trillion as of June 30, 2020. Total public debt showed that external debt was ₦11.36 trillion (36.65 percent) while domestic debt was ₦19.65 trillion (63.35 percent). The total States and Federal Capital Territory (FCT) domestic debt was at ₦4.19 trillion with Lagos state accounting for 11.77 percent of the debt stock while Yobe State has the least debt stock with 0.70 percent.

By FSDH Research

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