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Weekly Market Wrap - 16 November 2018

 

Bourse closes positive amidst negative w/w                                                     

The market ended trading for the week on a positive note, gaining 61bps on the day but losing 44bps w/w. Notably, after losing all week (w/w:-83bps), the Banking sector saw a rebound of 375bps today, driven by gains in  GUARANTY (d/d:+853bps; w/w:-67bps) and ZENITHBANK (d/d:+300bps; w/w:-164bps. Meanwhile, all other sectors closed red, led by the Industrial Goods sector (d/d:-47bps; w/w:+102bps) after DANGCEM (d/d:-73bps; w/w:-73bps) and CCNN (d/d:-27bps; w/w:+307%) posted losses. The Consumer Goods (d/d:-36bps; w/w:+4bps) and Oil & Gas sectors  (d/d: -31bps; w/w:-113bps) also fell, dragged by NESTLE (d/d:-133bps; w/w:+137bps)and OANDO (d/d:-99bps; w/w:+753bps). With weak sentiment continuing to drive tepid activity, we foresee another mixed to negative start to next week’s trading.                                                                

Stock Watch: DIAMONDBNK has lost in 4 sessions this week and currently trades at -40% YtD. The stock shed 526bps today to settle at a year-low of ₦0.90.                                                   

Bearish market continues amidst tightened liquidity                                                    

System liquidity remained tight this week, mostly affected by the OMO auction where the CBN sold a total of ₦320 billion (₦500 billion offered). Amidst this, the interbank call rate advanced 208bps w/w to close at 6.33% on Friday. Amidst constrained liquidity, trading in the T-bills space was mixed with a negative tilt this week, with yields advancing 15bps w/w and 1bp today. Likewise, trading in the bond space was bearish, with yields on benchmark bonds advancing 7bps w/w and 1bp today. Following still-tight market liquidity and tepid investor sentiment, we expect trading to remain muted in the fixed income market at week open.