The Market Today - 09 January 2019
Trouble brewing in 9mobile?
According to media reports, Teleology Holdings Limited is seeking to exit its investment in 9mobile Nigeria Limited. We recall that two months ago, Teleology Holdings received approval from the NCC to take over the operations of 9mobile which had defaulted on a $1.2 billion loan owed to a consortium of 13 Nigerian Banks. However, internal disputes and dissatisfaction have reportedly caused the founder of Teleology Holdings and former MTN Nigeria CEO, Mr. Adrian Wood to resign from the 9Mobile board. Whilst neither Teleology Holdings nor 9mobile have made official statements, it is unclear how this development would impact the debt restructuring talks and thus, we foresee some cautious sentiment around the lenders involved in the matter.
Bears persist as ASI declines further on weak trading
Negative sentiment held sway in the market once again as the ASI closed 120bps down, dragged by three of four key sectors. Market breadth remained negative with 14 advances and 26 declines. As expected, investor sentiment has been weak ahead of the General elections. Thus, we expect further declines in the market today.
Stock Watch: According to media reports, Teleology holdings seeks to exit its investment in telecoms giant, 9mobile following an internal dispute. 9Mobile remains indebted to several Nigerian Financial institutions and following this announcement, we foresee some negative sentiment on these banks, which include ACCESS, ZENITHBANK, GUARANTY and UBA.
Constrained liquidity muffles trading in T-bills space
The CBN conducted an OMO auction yesterday, selling ₦11 billion (offer: ₦60 billion) across the 107DTM, 170DTM and 317DTM bills at stop rates of 11.90%, 13.50% and 15.00% respectively (effective yields 12.33%, 14.41% and 17.70%). In spite of the mop up, the Interbank Call rate declined 83bps to settle at 25.00%. Amid the CBN’s tight monetary stance, we anticipate another OMO auction today and foresee further mixed trading in the FI space.
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