Nigerian Stocks Close Positive Two-Straight Days on Blue-chip Gains

L – R: Shows Oscar Onyema, CEO, NSE present a gong to Ms. Folake Fatogbe, Chairman, Board of Trustees, Risk Managers Association of Nigeria (RIMAN) at Closing Gong Ceremony at the Exchange on Wednesday.

August 2, 2017/InvestmentOne Research

Please click to download the Market Report for Wednesday 2nd August 2017

 EQUITIES:

  • The equities market closed positive for the second consecutive trading session today, gaining +0.50% to end at 36,905.06pts. Today’s performance was largely driven by the gains in NB (+98pts), WAPCO (+40pts) and ZENITHBANK (+32pts), which more than offset the sell-off in Oil & Gas names; SEPLAT (-30pts) and MOBIL (-13pts), and OKOMUOIL (-11pts).
  • Furthermore, market breadth index closed positive (+0.14x) as 31 stocks gained against 18 stocks that declined. CILEASING (+10.00%) was the best performer today while OKOMUOIL (-5.00%) led the losers’ chart.
  • Market activity declined significantly today as investors exchanged 251m units of shares worth N3.8bn against the 850m units of shares worth N94bn traded yesterday. TRANSCORP was the most actively traded stock with c.35m units of shares accounting for c.14% of total volume.
  • With the exception of the Oil & Gas sector (-2.43%), all other major sectors ended in the green. The Industrial sector (+1.93%) was the best performer followed closely by Consumer Goods (+1.63%). The Banking sector inched up +0.49%..
  • In the near term, we see expectation of positive earnings scorecards by tier 1 banking players as a potential catalyst for the index performance. That said, we however reiterate the potential for profit-taking given recent gain in the index.

CURRENCY:

  • At the IEFX window, the Naira shed -0.52% to close at N368.50 to the USD. It also declined by -0.25% against the EUR to close at N432.59 while up by +0.06% against the GBP to N482.68.
  • At the parallel market, the Naira firmed by +0.55% and +0.42% against the USD and GBP to settle at N363 and N473  respectively while closing flat against the EUR at N422.
  • Going forward, we expect the NGN to continue to see support from the CBN’s FX sales.

FIXED INCOME:

  • Though system liquidity closed at c.N75bn positive, money market rates inched up across tenors. The open-buy-back and overnight rates rose to 20.17% and 19.67% from 5% and 5.5% level respectively in previous session. In today’s primary auction, the CBN sold c.N229bn worth of T-bills to investors at stop rates of 13.42%, 17.40% and 18.53% respectively  for  the 91-day, 182-day and 365-day bills respectively.
  • We expect support to system liquidity from c.N85bn OMO maturity hitting the system tomorrow. With that said, we however expect CBN to sell OMO bills to drain excess liquidity in defence of the local currency.
  •  Yields on FGN bonds closed flat across tenors. This may not be unconnected with notice of temporary closure of the market issued by FMDQ earlier in the week due to incidence of unsettled trades among participants. Consequently, yields on the 5yr, 7yr and 10yr benchmark bonds closed at 16.19%, 16.29% and 16.29% respectively.
  • We expect activity in subsequent session to be influenced by liquidity levels.   

Below are key NSE statistics as at the end of trades:

Current

36,905.06

Mkt Cap (N’tr)

12.72

Previous

36,720.62

Vol. Traded (m)

                                 251

Day Change

+0.50%

Vol. Day Chng.

-70%

WTD Return

0.11%

Val. Traded (N’bn)

                                3.78

MTD Return

2.96%

Val. Day Chng.

-96%

YTD Return

37.32%

No. of Deals

5,558

YTD High

37,245.17

No. of Gainers

31

YTD Low

24,581.99

No. of Losers

18

52wk High

37,245.17

Top Sub Sect. (by Vol.)

BNK (61%)

52wk Low

24,581.99

Top Sub Sect. (by Val.)

BNK (51%)

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