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Weekly Market Wrap - 12 October 2018

ASI manages positive w/w close despite damp sentiment                                                          

Following another mildly positive trading session on the exchange (+12bps), the NSE All-Share Index closed the week with a modest +23bps w/w close. Three of the four key sectors finished in the green, with small-cap stocks dominating trading in a quiet day for heavyweights. The Consumer Goods (d/d: +34bps w/w : -72bps) and Oil and Gas (d/d: +12bps; w/w:-88bps) sectors came out marginally on top at week close, however still posting losses w/w following declines recorded earlier in the week – major movers were INTBREW (d/d: +492bps; w/w:-154bps), NB (+353bps; w/w: -190bps), OANDO (d/d:+100bps; w/w:-288bps). Though closing positions for the week indicate a positive tilt to trading, thin volumes and weak investor appetite signal still damp sentiment and as such we foresee more mixed closes in the week ahead. Meanwhile, the Banking sector (d/d: +32bps; w/w:+82bps) also gained on the day thanks to upticks in ZENITHBANK (d/d: +68bps; w/w:+ 302bps) and UBA (d/d:+62bps; w/w:-122bps). Finally, the Industrial Goods sector was the sole loser at week close, moderating 6bps (w/w: +33bps) following losses in small-cap CUTIX (d/d:-993bps: w/w:-17.55%).                                                   

Stock Watch: After gaining 10% in Friday’s session alone for a 17% w/w gain, WEMABANK closed at ₦0.66 on Friday. This represents a 27% return YTD, far outperforming the Banking index (-13%) and making it one of the best performing Tier-II banking names.                                                          

Fixed Income market closes negative amid liquidity strain                                                         

With system liquidity still tight following yesterday’s OMO sale of ₦250 billion (₦300 billion offered), the interbank call rate rose from 9.00% to close at 19.17%. As a result of tight liquidity following the liquidity mop up during the week, we expect tepid trading in the fixed income market at week open.           

The CBN continued its intervention in the Foreign Exchange market, injecting $210 million into the various FX windows on Wednesday. Amid this, the naira depreciated ₦0.20 w/w at the I&E FX Window to settle at ₦364.12 against the dollar and ₦0.50 to settle at ₦360.00 in the parallel market.