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Weekly Market Wrap - 10 August 2018

Industrials sell-off caps negative trading week                                                

The market drew to a -217bps close for the day and a -289bps w/w close as negative sentiment continued to hamper the market, with all key sectors closing lower w/w. The Industrial Goods sector (d/d: -539bps; w/w: -442bps) was the biggest loser at week close, as  sharp declines in DANGCEM (-614bps) and WAPCO (-635bps) dragged the sector and the ASI. The Banking (d/d:-75bps; w/w: -135bps) and Consumer Goods (d/d: -5bps; w/w: -33bps) sectors also closed in the red following losses in ETI (-497bps), UNITYBNK (-638bps), FLOURMILL (-353bps) and DANGSUGAR (-250bps). The Oil and Gas sector was the sole sector in the green on Friday, shaking off prior losses to gain 46bps thanks to upticks in MOBIL(+353bps) and FO (+22bps).                                                     

Stock Watch: DANGCEM is currently down 7% ytd trading at ₦214.00, its lowest price since October 2017. The stock lost 614bps at week close, it’s largest daily loss in two months.                                                  

Yields climb in the fixed income market                                                             

Trading persisted negative in the T-bills space at week close, as liquidity remained tight following the ₦377 billion liquidity mop up in the previous session. Yields rose 7bps on average across this space, as yields on the 13DTM and 342DTM bills advanced 59bps and 23bps to settle at 11.02% and 12.86% respectively. Likewise, strong sell pressure was evident in the bond space with yields on benchmark bonds advancing 19bps on average. Notably, yields on the 15.54% FGN FEB 2020 and 16.2884% FGN MAR 2027 bonds rose 104bps and 29bps to settle at 13.96% and 14.50% respectively. At the end of a rather tepid week, yields had risen 19bps w/w and 23bps w/w respectively across T-bills and benchmark bonds.                                                

The CBN intervened in the currency market this week by injecting FX into the system. The apex bank sold $210 million on Thursday, across various dollar windows in the market. Meanwhile, the naira appreciated ₦0.67 w/w at the I&E FX Window to settle at ₦362.00 against the dollar while depreciating ₦0.50 w/w to settle at ₦359.00 in the parallel market. The apex bank also sold $340 million worth of yuan in retail Secondary Market Intervention sales this week.