Daily Market Update Mar 19, 2020

EQUITIES

Nigerian stocks closed lower, wiping off the previous day’s gains as investors took profits across bellwether stocks — MTNN (-4.8%), DANGCEM (-3.3%). Thus, the All-Share Index declined by 3.12% to 22,078.58 points. Accordingly, the Month-to-Date and Year-to-Date losses increased to -15.8% and -17.8%, respectively.

The total volume of trades decreased by 21.7% to 525.85 million units, valued at NGN4.74 billion and exchanged in 5,450 deals. ZENITHBANK was the most traded stock by volume at 118.45 million units while GUARANTY was the most traded stock by value at NGN1.83 billion.

Sectoral performances were broadly negative with losses recorded in the Banking (-7.8%), Industrial Goods (-1.5%), and Consumer Goods (-1.0%) indices. Conversely, the Insurance (+0.9%) and Oil and Gas (+0.6%) indices closed higher.

Market sentiment, as measured by market breadth, was negative (0.4x), as 22 tickers declined, relative to 13 gainers. UCAP (-10.0%) and ZENITHBANK (-10.0%) were the top losers, while AFRIPRUD (+9.9%) and JAIZBANK (-9.8%) recorded the largest declines of the day.

CURRENCY

The naira strengthened by 1.3% to NGN375.00/USD in the parallel market but weakened by 0.6% to NGN370.35/USD at the I&E FX window.

MONEY MARKET & FIXED INCOME

The overnight lending rate contracted by 530bps to 5.9%, as inflows from OMO maturities (NGN344.50 billion) boosted system liquidity. At today’s OMO auction, instruments worth NGN150.00 billion were on offer to market participants across all tenors. However, no sale was recorded.

Activities in the NTB secondary market were bullish as investors covered for lost bids at yesterday’s NTB PMA. Yields declined at the mid (-39bps) and long (-7bps) segments of the curve following buying interest in the 133DTM (-70bps) and 196DTM (-28bps) instruments, respectively; yields were flat at the short end. Similarly, average yield declined in the OMO secondary market by 7bps to 16.6%.

Trading in the Treasury bond secondary market was bearish, as average yield expanded by 7bps to 11.6%. Across the curve, yields expanded at the mid (+6bps) and long (+38bps) segments of the curve, following sell-offs of the JUL-2030 (+20bps) and JUL-2034 (+85bps) bonds, respectively. Conversely, yields contracted at the short (-18bps) end of the curve as market players sold-off the JUL-2021 (-35bps) bond.