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Markets: Bullish bias for bond as CBN prepares to offer N145.00 billion worth of instruments, ASI up 0.3% to 25,654.90 points, naira gains

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STOCK EXCHANGE

TUE, 22 SEPT, 2020-theGBJournal-The domestic bourse closed higher on the back of interest in MTNN (+2.4%), thus the ASI advanced by 0.3% to 25,654.90 points. Accordingly, the Month-to-Date gain increased to 1.3% while the Year-to-Date loss moderated to -4.4%.

The total volume of trades increased by 33.6% to 262.05 million units, valued at NGN4.40 billion and exchanged in 3,254 deals. ZENITHBANK was the most traded stock by volume at 45.88 million units while MTNN was the most traded stock by value at NGN1.59 billion.

Sectoral performance was negative, following losses in the Insurance (-1.1%), Banking (-0.6%), Oil & Gas (-0.2%), Industrial Goods (-0.1%) and Consumer Goods (-0.1%) indices.

Market sentiment, as measured by the market breadth, was negative (0.5x), as 17 tickers lost, relative to 9 gainers. UBN (-6.5%) and CORNERST (-6.3%) recorded the largest losses of the day while REDSTAREX (+9.8%) and CHIPLC (+9.7%) topped the gainers’ list.

Currency

The naira strengthened at the I&E window by 0.1% to NGN385.80/USD, while it was flat at NGN465.00/USD in the parallel market.

Money Market & Fixed Income

The overnight lending rate contracted by 25bps to 1.8%, in the absence of any significant funding pressure on the system.

Trading in the NTB secondary market was mixed, as the average yield was flat at 1.7%. On the other hand, average yield contracted by 12bps to 1.9% at the OMO secondary market.

Trading in the Treasury bond secondary market was mixed with bullish bias, as investors ready bids for tomorrow’s PMA, where the CBN will be offering NGN145.00 billion worth of instruments through four re-openings. Consequently, average yield pared by 1bp to 7.5%. Across the curve, yield contracted at the short (-3bps) and mid (-1bp) segments, following demand for the JAN-2026 (-17bps) and MAR-2027 (-8bps) bonds, respectively; average yield was flat at the long end.-with Cordros Research

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