Weekly Market Wrap - 09 November 2018

Volatile trading week ends on a negative note                                                

The market ended trading for the week on a mildly negative note, moderating 9bps on the day but closing +23bps higher w/w. The Consumer Goods sector (d/d: +11bps; w/w:+165bps) was the best performer, driven by gains in NESTLE (d/d: +69bps; w/w: +735bps). Meanwhile, the Oil & Gas sector (d/d: +160bps; w/w:+127bps) also closed in the green thanks to a solid performance from SEPLAT (d/d:+478bps; w/w:+696bps). On the other hand, the Industrial Goods sector (d/d:-107bps; w/w:-381bps) was the biggest loser for the day and week after WAPCO (d/d:-446bps; w/w:-14.29%) and CCNN (d/d:-192bps; w/w:-11.60%) posted heavy losses. Finally, the Banking sector (d/d:-65bps;w/w:-47bps) witnessed a mixed trading week but ended in the red as a heavy loss in ACCESS (d/d:-191bps; w/w:-778bps) outweighed gains in ZENITHBANK (d/d:+41; w/w:+361bps).                                                          

Stock Watch: After hitting its year-low of ₦9.00 last week Friday, UACN gained 11.11% this week to settle at ₦10.00. The stock is trailing its year-open price of ₦16.90 by 41%.                                                             

Tight liquidity leads to bearish market as yields rise w/w                                                           

"System liquidity was relatively tight this week, mostly affected by two OMO auctions where the CBN sold a total of ₦687 billion (₦1.1 trillion offered). Amidst this, the interbank call rate advanced 58bps w/w to close at 4.25% on Friday. With the CBN keeping a lid on system liquidity, we expect trading to remain muted in the T-bills space at week open. Meanwhile, we expect mild demand in the bond space next week as the announcement of a Eurobond issuance this month is likely to increase the expectation of reduced bond supply.