30-09-2015 by 
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EQUITIES:  

  • As witnessed in yesterday’s trading session, another late mark-up in DANGCEM (+435pts) drove the ASI into the green after the broad index saw a sustained decline for the most part of the session. In its best performance in two weeks, the index rose by +1.27% to close at 31,217.77 points, with a corresponding market capitalization of N10.73 trillion. Year-to-date (YTD) return currently stands at -9.92%.
  • Market activity came in mixed as volume traded dropped by -41.1%, while market turnover rose by +108.4% respectively. In all, 416 million units of shares valued at N5.24 billion were traded in 3,603 deals.
  • The performance of major sector trackers in today’s session came in mixed: with Oil and Gas, and Banking declining by -0.11% and -0.54% respectively. While the Consumer goods and Industrial tracker gained +0.34%, and +2.55% respectively. Sector performances were driven largely by FO (-0.80%), GUARANTY (-1.15%), NESTLE (+1.20%), and DANGCEM (+4.65%).
  • Market breadth index closed negative at -0.03x as REDSTAREX (-5.00%) led 26 losers against 22 gainers topped by HONYFLOUR (+9.84%).
  • In all, we expect the market to remain volatile in the near term with expected support from the potential ministerial announcements. Overall, we advise cautious trades.

 

CURRENCY:

  • Activity in the FX market remained largely unchanged as the Naira traded range bound due to continued support from the CBN.
  • As at the close of trades today, the Naira closed flat against the USD at N199/$.
  • The local currency however depreciated relative to the European currencies, declining by -1.06% and -0.71% against the Pound Sterling and Euro to settle at N301.47/£ and N222.50/€ respectively.
  • Support from the CBN at N197/$ levels is expected to keep the local currency range bound at the interbank market in coming sessions.

 FIXED INCOME:

  • Rates at the interbank market contracted by 26bps on average to close at 13.05%, as  system liquidity increased to N381bn. The overall decline was largely driven by a 46bps drop in the 180-day NIBOR to 16.62%. In the same way, the 30-day (14.19%) and 90-day (15.552%) rates shed 39bps and 28bps respectively. The overnight  lending window however closed in contrast to the market, advancing 10bps to settle at 5.83%.
  • Given the relatively high level of system liquidity, we expect rates to contract further in coming sessions.
  • The average bond yield expanded by 5bps in today’s session to close at 15.10%.  This was as a result of profit taking on recent gains. The yields on the benchmark bonds all advanced in line with the overall market, with the 5yr, 7yr and 10yr bond yields rising  by 12bps, 13bps and 11bps respectively.
  • We advise investors remain cautious in the bonds space as macro concerns linger.



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