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Weekly Market Wrap - 03 August 2018

Bourse slides mildly w/w as blue chips suffer                                                   

The ASI drew to a -52bps close for the day and a -37bps w/w close as losses were observed in the blue chip stocks once again. The Banking and Consumer Goods sectors were the major drivers of the negative activity. The Banking sector (d/d: -90bps; w/w: +83bps) was the biggest loser, but managed positive gains w/w, as negative closes in  ETI (+58bps) and UBA (-457bps) dragged the sector. The Consumer Goods sector was also on the losing side as declines in DANGSUGAR (-274bps) and INTBREW (-161bps) pulled the index 39bps lower d/d and 101bps lower w/w. Meanwhile, the Industrial Goods (d/d: +50bps, w/w: -53bps) and Oil and Gas (d/d: +19bps; w/w: +676bps) sectors both closed higher thanks to gains in BETAGLAS (+10.00%), WAPCO (+72bps), SEPLAT (+85bps) and ETERNA (+83bps).                                                            

Stock Watch: WEMABANK has lost 10% in the last eight sessions. The stock is still outperforming other banking stocks – returning 32.69% ytd compared to the -2.89% ytd average and is the third best performing banking stock.                                                               

Yields head south for the week in FI market                                                      

Sentiment was positive at the beginning of the week amidst healthy system liquidity as both spaces of the fixed income market saw yields moderate. Trading turned mixed on Tuesday as yields remained flat on average. On Wednesday, the CBN conducted a PMA offering and selling ₦216 billion on the 91DTM, 182DTM and 364DTM bills at respective stop rates of 10.00%, 10.40% and 11.30%, lower than rates at the previous PMA. On Thursday, the CBN mopped up ₦363 billion (offer: N600 billion) amid an OMO inflow of ₦324 billion, with this T-bills closed flat on average while yields on benchmark bonds moderated a meagre 4bps. Market momentum turned down beat on Friday as yields advanced both on T-bills and benchmark bonds. Overall, yields in the T-bills market declined 13bps on average through the week. Similarly, though milder, buying was evident on the bonds space as yields on benchmark bonds shed 5bps on average w/w.                                                 

The CBN continued its regular interventions in the currency market this past week, through a spate of spot and forward currency sales. Notably, the apex bank sold $210 million on Thursday, across various dollar windows in the market. Meanwhile, the naira depreciated ₦0.39 w/w at the I&E FX Window to settle at ₦362.67 against the dollar while remaining stable throughout the week at ₦358.50 in the parallel market. The apex bank also sold $340 million on retail Secondary Market Intervention sales for the Yuan this week.