Weekly Market Wrap - 17 August 2018
Market rallies at week close as Industrials recover
After posting ten straight negative closes, the ASI recorded a 187bps rebound at week close following a strong recovery in Indsutrial Goods. This gain was however unable to offset earlier losses with the index recording a 51bps w/w loss. The rebound in the Industrial Goods sector (d/d:+351; +129bps) was solely buoyed by sizable gains in DANGCEM (+680bps). The Consumer Goods sector (d/d:+26bps; w/w -112bps) also recorded a positive session at week close thanks to DANGFLOUR (+132bps) and UNILEVER (+377bps). Meanwhile, the Banking and Oil and Gas sectors remained in the doldrums, down 19bps and 11bps respectively on Friday to close 380bps w/w and 147bps lower w/w, as sizable losses in UBA (-11.64%) and OANDO (-11.71%) dragged the sectors.
Stock Watch: UBA is one of the last Tier 1 banking institutions yet to release their H1’18 financial statements. The stock has lost for four straight sessions in the past week to settle at ₦8.35, a ytd loss of 19%.
Weak sentiment persists as yields inch higher
Sell-offs persisted in the T-bills space at week close as yields advanced 9bps d/d and 17bps w/w – despite healthy system liqiudiity of ₦382 billion. The yield on the 153DTM bill saw the largest increase, rising 43bps to 13.35% today. Bearish sentiment was also prevalent in the bond space as yields on benchmark bonds advanced 15bps d/d and 46bps w/w. Today’s noteworthy movements were on the 16.39% FGN JAN 2022 and 12.40% FGN MAR 2036 bonds which advanced 60bps and 24bps to settle at 14.37% and 15.01% respectfively.
The CBN sustained its intervention in the currency market this week by injecting FX into the system. The apex bank sold $210 million on Tuesday, across the various windows in the market. Meanwhile, the naira appreciated ₦0.50 w/w at the I&E FX Window to settle at ₦362.50 against the dollar while remaining unchanged at ₦358.50 in the parallel market.
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