The equity market extended its stay in the bearish region, as we witnessed a further decline in the ASI today. The benchmark index dipped by 0.36% to 37,857.89 points. Year to date return and market capitalisation settled at -5.99% and N19.73 trillion, respectively. Market breadth was positive at 1.15x, as we recorded 15 advancers as against 13 decliners.
Volume traded declined by 22.58% to 187.24 million units while value traded advanced by 6.74% to N2.89 billion. The most traded stocks by volume were ZENITH BANK (35.32 million units), SOVRENINS (14.16 million units) and UBA (14.11 million units), while ZENITH BANK (N870.87 million), MTNN (N777.74 million) and AIRTELAFRI (N414.72 million) topped the value chart.
We anticipate some bargain hunting around the fundamentally sound stocks.
Currency Market
The Naira appreciated against the US Dollar by 6bps to $1/N411.50 at the investors and exporters window. At the parallel market, the local currency remained unchanged against the US Dollar at $1/N505.00.
Money Markets
System liquidity increased today, on the back of a N94.22 billion Repo inflow from the Apex bank. The ensuing impact of this inflow was the decline in interbank rates. Accordingly, the Open Buy Back (OBB) and Overnight (OVN) Rates dipped by 525bps and 550bps, settling at 14.50% and 15.00%, respectively.
We expect rates to remain pressured southwards, barring any significant outflows.
Treasury Bills Market
The Treasury Bills market was quiet today, with most activities skewed towards the mid to long end of the curve. Average benchmark yields remained unchanged at 6.94%.
We expect the rising system liquidity to exert downward pressure on rates.
FGN Bond Market
Activity in the Bond market maintained its relatively quiet trend in today’s session with minimal volumes traded across the board. The mixed sentiment was seen at the short to mid-end of the curve, causing average benchmark yields to remain unchanged at 12.33%.
We expect the market to start pricing in the impact of the massive inflows expected at the later part of the week.
FGN Eurobond Market
The Eurobond market saw some slight demand today, with minimal volume traded across the board. Investors shrugged off the increase in the 10-year U.S. Treasury yield and the fall in crude price, as they picked up notes that suffered marginal selloffs last week. Average benchmark yields declined by 3bps to 5.76%.
