NIGERIA | Daily Market Wrap | 12-Mar-2018 | Elixir Research


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.


Corporate News: 



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.