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Weekly Market Wrap - 08 March 2019

Market loses 27bps on Friday, ASI up 31bps w/w                                                             

In its third negative session this week, the NSE ASI lost 27bps today, capping w/w gains at +31bps w/w. Notably, the Consumer Goods sector posted the highest loss today, dropping 98bps d/d (-102bps w/w) following losses in DANGFLOUR (-793bps d/d) and NB (-402bps d/d). Similarly, the Banking sector moderated 14bps d/d after a 142bps d/d gain in ZENITHBANK was erased by losses in UBA (-129bps d/d) and GUARANTY (-93bps d/d). A 38bps d/d decline in WAPCO also dragged the Industrial Goods sector 5bps lower today. Meanwhile, the Oil & Gas sector (+25bps) was the sole gainer thanks to a 179bps uptick in OANDO. Following a tepid week driven by investor apathy and barring any political unrest, we foresee tepid activity, with the possibility of bargain-hunting. We also expect further earning releases drive a bit of interest in the equity market.                                                       

Stock Watch: Despite a 4.95% gain on Friday, PZ has lost 13% this week – the worst perfoming stock in the week. The stock currently trades at ₦11.65, 3.72% below its year open price (Consumer Goods sector: 3.39%).                                                        

Bearish sentiment drives secondary market                                                      

The CBN sold ₦817 billion (₦850 billion offered) in four OMO auctions this week across the short and mid-dated maturities at stop rates of 11.90% and 13.45% respectively. Notably, the CBN did not offer the longest dated bill at any of the auctions this week. Amidst this, the Interbank Call rate declined 716bps w/w to settle at 9.17%. The DMO recently released the March Bond circular, indicating a lower supply of ₦100 billion (February sale: ₦150 billion) with only ₦20 billion of the 10-year maturity on offer (February sale: ₦136 billion). On the back of this, we foresee increased demand in the bond secondary market next week. That said, we anticipate a tepid T-bills market as the CBN continues to mop-up liquidity.