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REPORTS OF EQUITY TRADING AND THE MONEY MARKETS YESTERDAY

 

cbn3 REPORTS OF EQUITY TRADING AND THE MONEY MARKETS YESTERDAYcbn3 REPORTS OF EQUITY TRADING AND THE MONEY MARKETS YESTERDAYcbn3 REPORTS OF EQUITY TRADING AND THE MONEY MARKETS YESTERDAY

 

 

 

 

 

According to the report release from an online portal last night the Nigerian equities market closed in the red, driven by selloffs in major industrial goods stocks.  The All Share Index declined by 0.31% to close at 25,406.72 points.Today’s negative performance reduced the Month-to-Date gain to 0.31%, while it increased the Year-to-Date loss to 5.46%.The Industrial Goods (-1.98%) and Insurance (-0.69%) indices closed lower, owing to losses recorded by DANGCEM (-1.82%) and CONTINSURE (-4.39%) respectively. On the flip side, the Oil & Gas (+2.69%), Banking (+0.65%) and Consumer Goods (+0.19%) indices gained, following demand for SEPLAT (+10.25%), FO (+0.09%), ZENITHBANK (+1.48%), GUARANTY (+1.70%), NESTLE (+0.13%) and 7UP (+3.75%) respectively.Market breadth was positive, with 22 gainers versus 14 losers. Total volume traded increased by 63.19% to 916.26 million shares, valued at N2.41 billion, and exchanged in 3,342 deals. Corporate Release: 2016FY earnings: FCMB (PAT: -105.53%; Proposed final dividend: N0.10), GLAXOSMITH (PAT: -72.76%), HMARKINS (PAT: -64.28% y/y; Proposed final dividend: N0.02), LIVESTOCK (PAT: -18.96% y/y). As irrational selloffs wear off in WAPCO, we expect losses to reverse in the following session. 

In a related development the Central Bank of Nigeria (CBN) has set a new naira rate of NGN362/USD – an 11% increase from the rate set in January – for retail exchange bureaus to sell dollars to customers, according to the head of the association. Thus, this week, the CBN would sell USD8,000 each to the members of the association at NGN360/USD (the same price which the apex bank set for commercial lenders yesterday), which they have been instructed to resell to consumers at a profit margin of NGN2. Aside that, it was business as usual in the currency space, with the naira — in the interbank window — appreciating against two of the currencies we track. The NGN/USD (+0.05%) and NGN/GBP (+0.05%) strengthened to N306.65 and N400.69 respectively while the NGN/EUR (-0.03%) weakened to N345.02. In the parallel segment, the LCY strengthened against the dollar (+3.85%), pound (+5.10%) and euro (+6.98%) to trade at N375.00, N465.00 AND N400.00 respectively. Setting a rate for the Naira can  sustain the current strength the currency has enjoy for sometime now, but the question is how long will this last. We have adviced in this forum that the only thing that can stabilised the Naira is government resolve to put the necessary things that can make the economy viable, whatever policy in place now can only give it a temporal strength.  The money market overnight rate declined by 42bps to 13.00%, from yesterday’s close of 13.42%, despite system liquidity falling to a deficit of N68.15 billion. At today’s OMO auction, the apex bank sold N15.93 billion (vs. N20.00 billion) of the 01-MAR-2018 bill at a stop rate of 18.60%.

The Nigerian treasury bills market was quiet, with 56% of traded bills closing flat.  That said, yields at the short (+25bps) and intermediate (+3bps) ends of the curve were pressured, as the 27-APR-17 (+211bps to 11.80%) and 17-AUG-17 (+56bps to 18.59%) bills were respectively sold-off. Modest demand occurred at the long (-1bp) end, owing to the 18-JAN-18 (-21bps) bill. Overall, the market closed on a bearish note, with average yield expanding by 7bps to 17.32%. Likewise, investors were downbeat in the bond space, with average yield expanding by 9bps to 16.19%. Yield expansion at the short (+50bps) end — driven by a selloff of the APR 2017 (+224bps) bond — overshadowed demand at the mid (-2bps) and long (-3bps) ends of the curve. The FEB 2020 (-11bps) and NOV 2028 (-4bps) maturities recorded the largest yield contraction at both the mid and long ends respectively.

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