WEEKLY MARKET WRAP: Market Snaps Losing Streak At Week Close

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  • Despite closing out the week on a positive note (ASI up 26bps today), the NSE posted a 48bps w/w decline amidst earlier weightier declines. The Oil & Gas sector (+182bps d/d; +13bps w/w) was the biggest gainer today on the back of gains in ETERNA (+500bps) and SEPLAT (+345bps) despite a loss in TOTAL (-18bps). The Banking sector also closed higher (+59bps d/d; +45bps w/w) following advances in ZENITHBANK (+340bps) and ETI (+24bps) which overshadowed a loss in GUARANTY (-56bps). Though leading laggards for the week, the Consumer Goods sector (+7bps d/d; -190bps w/w) closed higher at week close after a positive performance by NESTLE (+64bps) beat out a loss in NB (-64bps). Meanwhile, the Industrial Goods sector (-68bps d/d; -2bps w/w) closed in the red for the day and week after declines in WAPCO (-214bps) outweighed the weeks largest gainer, CCNN (+721bps d/d, +29.8% w/w).
  • Though the market swung into positive territory at week close, we believe the underlying mixed sentiment in the market will continue to drive a sideways trading pattern on the exchange in the coming week.
  • Stock Watch: DIAMONDBNK has shed 10% over the last five sessions. The stock was one of the biggest losers of the week (-9.95% w/w). They released Q1’18 results today reporting ₦48 billion (-2% y/y) in Revenue and ₦785 million (-82% y/y) PAT. The stock currently trades at a price of ₦1.90 and has returned 27% ytd.

Bearish session rounds up a week of selling

  • Sentiment this week was largely bearish as yields advanced 187bps on average w/w in the T-bills space and 30bps on average w/w on benchmark bonds. Sell pressure was particularly pronounced on T-bills at week close with yields rising 101bps on average. Notably, yields on the 20DTM, 167DTM and 314DTM bills rose 470bps, 224bps and 175bps to settle at 13.85%, 14.37% and 14.05% respectively. Trading in the bond market was similarly negative as yields on benchmark bonds advanced 12bps on average today. In particular, yields on the 14.50% FGN JUL 2021 and 16.2884% FGN MAR 2027 bonds rose 107bps and 15bps to close at 13.48% and 13.39% respectively.
  • Following the heavy sell-offs at the end of the week, there were some signs of market recovery towards the end of the session. In the absence of an OMO auction at week open, we anticipate a less frantic start trading for the week.
  • The CBN continued to support the Foreign Exchange market, notably injecting $210 million at week open into various segments of the market. With this, the naira depreciated ₦0.30 and ₦1.00 w/w at the I&E FX Window and in the parallel market to close at ₦361.05 and ₦362.00 respectively.
  • We expect the naira to remain stable across the various windows of the currency space as the CBN continues to intervene in the FX market.

Corporate Disclosure – Company Releases

  • Morison Industries Plc (“the Company”) notified its shareholders, the Nigerian Stock Exchange and the investing public that the Company’s Audited Financial Statements for the year ended 31 December 2017 was earlier forwarded to the Financial Reporting Council for review and clearance as a result of the inclusion of Emphasis of Matter on Material Uncertainty Related to Going Concern by the Company’s external auditors, BDO Professional Services. The Audited Financial Statement has now been cleared by the FRCN and was filed with the Nigerian Stock Exchange on 8th May 2018. The Company has also filed its
    unaudited financial statements for the first quarter ended 31 March 2018 which it was unable to publish due to outstanding audited financial statements.

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