Bourse snaps seven day losing streak at week close
Bargain hunters supported a 95bps recovery on the equity market at week close. However, this was unable to offset much stronger earlier losses that saw the All-Share Index shed 502bps w/w. Gains on the bourse were supported by the Banking sector (d/d: +279bps; w/w: -435bps) as last minute buying interest in ZENITHBANK (d/d: +230bps; w/w: -407bps) and GUARANTY (d/d: +546bps; w/w: -71bps) helped trim losses. Also, the Consumer Goods sector (d/d:+56bps; w/w:-537bps) recovered modestly today as investors took advantage of multi-year low prices in NB (+999bps d/d; -43bps w/w). The Industrial Goods sector (d/d: -46bps; w/w: -755bps) on the other hand continued to trend lower and was the worst performer for the week no thanks to CCNN (-26% w/w) and DANGCEM (-583bps w/w). Despite closing flat on the day, the Oil & Gas sector lost 167bps w/w following a slump in FO (-17% w/w).
Stock Watch: FLOURMILL shed 11.63% this week, bringing the stock to a 16-month low of ₦19.00. At a 48% discount from our target price (₦36.32) the stock is currently rated BUY.
Rising yields persist at week close
The CBN mopped up ₦104 billion across two OMO auctions during the week amid maturities of ₦268 billion. As a result, system liquidity remained buoyant at ₦712 billion and the interbank call rate climbed 34bps to 10.67% at week close. The T-bills market traded bearish on Friday as yields advanced 26bps (+166bps w/w) with notable advances on the 174DTM bill (+156bps to 14.01%). Trading in the bond space was more mixed with demand for short-dated bonds matched by sell pressure on longer-dated maturities. In particular, whilst yield on the 14.50% FGN JUL 2021 bond moderated 17bps to 15.33%, the yield on the 12.40% FGN MAR 2036 bond advanced 15bps to 15.48%. Overall, bond yields advanced 17bps w/w.
The naira depreciated ₦0.40 w/w at the I&E FX Window to settle at ₦363.18 against the dollar while remaining flat at ₦359.50 in the parallel market. We expect the naira to remain stable across the various windows of the currency space as the CBN continues to intervene in the FX market.
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