For the week ended December 27, 2019

The Punch - - FINANCIAL PUNCH - NASD –Un­listed Se­cu­ri­ties

The lo­cal eq­ui­ties mar­ket closed in the red zone amidst sus­tained sell-offs. Con­se­quently, NSE All-share In­dex and Mar­ket Cap­i­tal­iza­tion de­clined by 0.41 per cent to close the week at 26,416.48 and N12.70 tril­lion, re­spec­tively. With this, the NSE ASI has re­turned neg­a­tive 15.95 per cent year-to-date.

De­spite the de­cline in the ASI, three sub-sec­tor gauges closed in the green zone. NSE Con­sumer Goods, NSE In­surance and NSE Oil & Gas in­dices in­creased by 4.76 per cent, 1.42 per cent and 0.71 per cent to close at 582.11 points, 122.15 points and 234.12 points re­spec­tively. how­ever, NSE Bank­ing In­dex and NSE In­dus­trial in­dices closed in the red zone as they mod­er­ated by 0.26 per cent and 0.31 per cent to close at 354.50 points and 1,048.29 points re­spec­tively.

The eq­ui­ties mar­ket tanked fur­ther due ba­si­cally to profit tak­ing ac­tiv­i­ties by in­vestors. We still main­tain our view that in­vestors should take po­si­tions in qual­ity names with a medium to long term in­vest­ment hori­zon as prices re­main at­trac­tive at cur­rent levels.

As at close of trade week, Mar­ket Cap­i­tal­i­sa­tion and NSI closed the trad­ing week with no move­ment as against pre­ced­ing Fri­day, De­ce­me­ber 20 2019. The Mar­ket Cap­i­tail­sa­tion and NSI closed the week at N501.14bn and N697.54bn points, re­spec­tively.

Money mar­ket

Rates in the money mar­ket dropped by an av­er­age of c.750bps sup­ported by c.n900.00bn of OMO ma­tu­ri­ties flow­ing into the sys­tem. The OBB and OVN rates ended the week at 3.93 per cent and 4.57 per cent, re­spec­tively.

In the just con­cluded week, CBN sold trea­sury bills worth N250.51bn via Open Mar­ket Op­er­a­tion which partly off­set the to­tal in­flows from the ma­tured T-bills worth N277.80bn.

We ex­pect rates to re­main sta­ble at low levels next week, with a buoy­ant sys­tem liq­uid­ity and ex­pected OMO ma­tu­ri­ties of c.n500bn, bar­ring a CBN OMO auc­tion.

Bonds mar­ket

The Bond Mar­ket ended the hol­i­day-filled week on a bright note, with mixed sen­ti­ment seen across the bench­mark bond curve. We saw im­proved of­fers on the short-end, as some banks sold-off to re­al­ize year-end prof­its. On the con­trary, we saw con­tin­ued de­mand on the long-end (mostly the 2049s) as lo­cal in­vestors looked to rein­vest to­day’s OMO ma­tu­rity of c.n900.00bn. Con­se­quently, yields ex­panded by an av­er­age of c.5bps across the bench­mark bond curve.

We an­tic­i­pate a more bullish de­meanor at the start of next week, with mar­ket liq­uid­ity ex­pected to sup­port de­mand.

Trea­sury bills mar­ket

The Trea­sury Bills mar­ket re­sumed trad­ing after the Christ­mas break with im­proved de­mand no­ticed across the curve. We saw sig­nif­i­cant buy-in­ter­est in OMO bills, as in­flows from OMO ma­tu­ri­ties (c.n900.00bn) swayed in­vestors’ sen­ti­ment into lockingin ex­cess funds rather than hav­ing idle funds. Yields dropped by an av­er­age of c.18bps across the Bench­mark OMO curve. At the OMO auc­tion, CBN sold a to­tal of c.n250.51bn at only the long-end (361- Day), with the stop rate re­main­ing un­changed (13.28 per cent) from last week’s auc­tion. There was NO SALE on the 88-Day and 179-Day tenors. The NTB side wit­nessed slightly move­ment, with de­mand skewed to­wards the short to- mid- tenor ma­tu­ri­ties, with the ma­jor­ity of the con­sum­mated deals be­ing or­der­driven at re­tail size. Yields com­pressed up by an av­er­age of c.5bps across the NTB curve.

With NTB auc­tion ex­pected next week, we still ex­pect a bullish mar­ket es­pe­cially on OMO bills, with c.n500.00bn of ma­tur­ing funds ex­pected to flow in the sys­tem.

For­eign ex­change mar­ket

At the In­ter­bank, the Naira/usd and SMIS rate were un­changed to close the week at N307.00/$ and N358.51/$ re­spec­tively. At the I&E FX win­dow, the clos­ing rate for the Naira de­pre­ci­ated by 37k to close the day at N364.57/$. At the par­al­lel mar­ket seg­ment, the cash rates de­pre­ci­ated by 30k to close at N360.50/$ while the trans­fer rates ap­pre­ci­ated by 50k to close the week at N363.00/$.

In the out­go­ing week, CBN in­jected a to­tal of $210.00 m into the for­eign ex­change mar­ket; of which $100.00m was al­lo­cated to Whole­sale (SMIS), $55.00m was al­lo­cated to Small and Medium Scale En­ter­prises and $55.00m was sold for in­vis­i­bles.

We ex­pect the naira to re­main largely sta­ble across the var­i­ous win­dows of the cur­rency space as the CBN main­tains in­ter­ven­tions in the FX mar­ket.

Dr Bernard Ilori E-mail – [email protected] Mo­bile: 0903000447­7 (Sms/what­sapp only)

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.