FREE

Weekly Market Wrap - 29 March 2019

Market down 124bps ytd at the end of Q1                                                          

In its first significantly positive session of the week, the NSE ASI gained 67bps on Friday, moderating this week’s losses to 31bps. With the NSE submission deadline and a flurry of earnings releases driving market activity today, we expect trading next week to resume mixed, with a positive tilt as investors react to company performances.                                                     

Stock Watch: CCNN released its FY’18 results today, posting topline and bottom line figures of ₦31.7 billion (+62% y/y) and at ₦5.7 billion (+78% y/y) respectively. The stock gained 4.74% to settle at ₦19.90, 2.58% above its year open price.                                                        

CBN withholds OMO auctions this week                                                             

This week, the DMO conducted the March Bond Auction, selling ₦29 billion (₦100 billion offered) across the 5-year, 7-year and 10-year bonds, all at stop rates of 13.50% – lower than the previous month’s auction. On a non-competitive basis however, the DMO also sold ₦36 billion and ₦57 billion on the 5- and 7-year tenors respectively. Surprisingly, for the first time since September 2018, the CBN did not conduct any OMO auction all week, even as ₦61 billion hit the system via OMO maturities on Thursday. Consequently, the Interbank Call rate declined 439bps w/w to settle at 9.86%. Barring any OMO auction at week open, we expect further demand in the t-bills market, driven by healthy system liquidity. Meanwhile, we foresee the bond market opening the week on a quiet note, with mild sell-offs later on.   

The Naira depreciated ₦0.25 w/w at the I&E FX Window to settle at ₦360.68 and remained flat w/w at ₦358.50 against the dollar in the parallel market. We expect the naira to remain largely stable across the various windows of the currency space as the CBN maintains interventions in the FX market.