The Market Today - 12 December 2018
NBS reports 31% y/y decline in capital importation in Q3
The National Bureau of Statistics (NBS) released its capital importation report yesterday, showing the total value of capital imports stood at $2.86 billion in Q3’18, down 31% y/y and 48% q/q. This decline was driven by a moderation in foreign portfolio investment (FPI)—the largest capital import by type—by 38% to $1.72 billion, its lowest level since Q2’17 (pre-NAFEX window). We highlight that this moderation in FPI is in line with the 14% slump in the NSE ASI in the quarter as foreign investor sentiment turned bearish towards Nigeria. Amid softer oil prices, impending domestic elections, and notable currency pressure, we do not anticipate a near-term recovery in Nigeria’s capital imports.
Positive day on the NSE as three key sectors advance
In a slightly positive turn of events, the ASI gained 34bps yesterday following modest gains in three of the four key sectors. Market activity in the session also strengthened as turnover rose 103% d/d. Market breadth remained negative with 16 advances and 22 declines. With yesterday’s trading showing a slight improvement in market sentiment, we foresee a mixed trading session with a mildly positive tilt.
Stock Watch: GUARANTY has lost 4% in five consecutive sessions to settle at ₦34.40. The stock has lost 16% YTD, in line with the Banking Sector’s performance.
Interbank call rate on the rise amidst liquidity constraints
The CBN conducted another OMO auction yesterday, selling c.₦39 billion (offer: ₦100 billion) on the 177DTM and 268DTM bills (no sale on the 100DTM) at stop rates of 13.50% and 15.00% respectively (effective yields: 14.45% and 16.86%). Amid persistent mop ups, the interbank call rate advanced 25.83% to close at 65.00%. Particularly, the 12.50% FGN JAN 2026 and 13.98% FEB 2028 bonds declined 5bs and 13bps to close at 15.84% and 15.89% respectively. With the CBN retaining a tight monetary stance, we foresee continued mixed to negative trading in the secondary FI market.
Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.