12 Mar NIGERIA | Daily Market Wrap | 12-Mar-2018 | Elixir Research
Market Wrap | Bulls graze FGN debt market at week start as Equities open trading in red
Bulls graze FGN debt market at week start
- The CBN conducted an OMO auction today, offering ₦30 billion of the 87 DTM but sold ₦51 million at 12.60 stop rate (effective yield of 12.99%). Meanwhile, the banking system balance opened lower at ₦111.35 billion from ₦150.76 billion while the standing lending window (SLF) balance fell marginally to ₦27.31 billion from ₦27.63 billion. Following the contraction in system liquidity, the overnight rate and OBB expanded by 5.50 and 5.17 percent points to 14.67% and 13.67% respectively.
- The FGN debt market was little active today with some appreciable demand coming through. The average T-Bill yield closed lower by 7 basis points at 14.98%. At the bond space, demand was strong across the yield curve in contrast to trend last Friday. The average bond yield fell by 9 basis points to close at 13.75% on the day.
- As market continues to anticipate the Q2 T-Bill calendar release and the possibility of an MPC meeting, we expect trading to remain volatile. The CBN’s tightening is expected to keep buying at the T-Bill end capped.
Naira weakens at the IEW
- The Naira appreciated by 0.03% against the Dollar at the CBN official window to close at ₦305.85/$. At the IEW, it lost 0.04% to settle at ₦360.47, while it remained at ₦362/$ at the parallel market.
- Transaction volume at the IEW rose to $201.21 million, from $85.52 million traded at the previous session on Monday.
Market opens week trading in red
- The Nigerian equities market closed the first trading session of the week in the red, losing 0.26%. The benchmark index settles at 43,056.51 points, shrinking the year-to-date return to 12.59%.
- Sector performance was mixed. The banking index shed 0.90%, largely driven by DIAMONDBNK (-4.87%), UNITYBNK (-4.65%), UBA (-4.65%), UBN (-4.23%) and SKYEBANK (-3.23%). The consumer goods index closed down by 0.03%, following the losses in UNILEVER (-2.25%), FLOURMILL (-0.93%) and DANGFLOUR (-0.90%). The oil & gas index gained 0.28%, following the interest in TOTAL (+1.69%). The industrial index closed flat. The insurance index was up 0.80%.
- Market breadth index was negative as the trading session recorded 34 losers and 19 gainers. FBNH topped activity chart by volume, accounting for 51% of the market while FBNH, ZENITHBANK, and GUARANTY accounted for 81% of market value.
- In the absence of any catalyst, we expect the market to remain volatile in the near term as investors anticipate react to the 2017 earnings season.
Zenith Bank Plc today made public its 2017 full year result, showing an impressive performance across board. The bank proposed a final dividend of ₦2.45 kobo per share, which translates into a yield of 8% at current market price. This makes a total dividend of ₦2.70 kobo for the year. Key highlight from the result include: Gross Earnings rose by 47% y/y to ₦745.19 billion. Net interest income (NII) grew by 7% to ₦257.99 billion, impacted a 23% y/y jump in interest income to ₦474.62 billion and a faster 50% y/y rise in interest expense to ₦216.64 billion. Impairment loss was up 204% y/y to ₦98.23 billion. PBT and PAT grew by 30% y/y and 37% y/y to ₦203.46 billion and ₦177.93 billion. Closure date for dividend payment is scheduled for April 4 – 9, 2018, qualification date April 3, 2018; April 13, 2018 and April 13 for the AGM.