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Markets: Naira gains 0.1% at the I&E window, equities sustain rally as ASI closes 0.4% and bond average yield declines 23bps to 6.6%

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TUE, 29 SEPT, 2020-theGBJournal- The domestic equities market is on the edge of erasing the last of the losses taken following the first recorded case of COVID-19 in the country. The benchmark index notched a 0.4% gain, its eight successive climb, to close at 26,611.96 points – a seven-month high.  BUACEMENT (+3.3%), MTNN (+0.8%) and ZENITHBANK (+1.2%) led the way, driving the Month-to-Date gain to 5.1%, and shrinking the Year-to-Date loss to -0.9%.

The total volume traded increased by 22.6% to 413.10 million units, valued at NGN4.53 billion and exchanged in 4,618 deals. ZENITHBANK was the most traded stock by volume and value at 90.88 million units and NGN1.58 billion, respectively.

The performance was positive across all the sectoral indices; the Industrial Goods (+0.8%) index recorded the largest gain, followed by the Banking (+0.4%), Oil & Gas (+0.3%), Insurance (+0.2%) and Consumer Goods (+0.1%) indices.

Market sentiment, as measured by the market breadth, was positive (1.5x), as 16 tickers gained relative to 11 losers. WEMABANK (+7.6%) and AIICO (+6.3%) topped the gainers’ list while ETRANZACT (-10.0%) and CORNERST (-8.5%) recorded the largest losses of the day.

Currency

The naira appreciated by 0.1% to NGN385.75/USD at the I&E window, while it stayed flat at NGN467.00/USD in the parallel market.

Money market & Fixed Income

The overnight lending rate contracted by 87bps to 3.1%, following inflows to the system from OMO maturities (NGN28.00 billion).

Trading in the NTB secondary market was bearish, as the average yield expanded by 23bps to 1.9%. Across the curve, average yield expanded at the short (+21bps) and mid (+4bps) segments, following sell-offs of the 30DTM (+30bps) and 107DTM (+11bps) instruments, respectively. Conversely, average yield contracted at the long (-3bps) end, due to demand for the 226DTM (-13bps) instrument. Elsewhere, average yield was flat at 1.9% at the OMO secondary market.

At the Treasury bond secondary market, trading remained bullish, as average yield declined by 23bps to 6.6%. Across the curve, average yield contracted at the short (-46bps) and mid (-48bps) segments, following demand for the JAN-2022 (-183bps) and JUL-2030 (-126bps) bonds, respectively. On the other hand, average yield at the long (+10bps) end expanded, due to sell-offs of the MAR-2050 (+35bps) bond.

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