Home Companies&Markets Markets: Overnight lending rate contracts 450bps to 1.8% amid N336.09 billion OMO...

Markets: Overnight lending rate contracts 450bps to 1.8% amid N336.09 billion OMO maturities, Treasury bond expands 1bp to 4.2%

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STOCK EXCHANGE

…ASI gains 0.7%

Naira closed flat at NGN386.00/USD and NGN463.00/USD at the I&E window and parallel market

TUE, 27 OCT, 2020-theGBJournal-Positive trading ensued in the local bourse today, as investors were interested in BUACEMENT (+1.2%) and some banking stocks. As a result, the All-Share Index gained by 0.7% to 28,980.29 points – the biggest gain since rising by 1.1% on October 16th, 2020. Accordingly, Month-to-Date and Year-to-Date returns both increased to 8.0%.

The total volume of trades increased by 13.1% to 385.60 million units, valued at NGN2.91 billion and exchanged in 5,283 deals. FBNH was the most traded stock by volume and value at 81.78 million units and NGN505.53 million, respectively.

Sectoral performance was positive, following gains across board. The Insurance (+2.7%) index led the gains, followed by the Banking (+2.2%), Consumer Goods (+0.9%), Oil & Gas (+0.8%) and Industrial Goods (+0.5%) indices.

Market sentiment, as measured by the market breadth, was positive (23.0x), as 46 tickers gained, relative to 2 losers. LINKASSURE (+10.0%) and CONOIL (+9.8%) topped the gainers list, while WEMABANK (-1.7%) and NEM (-1.5%) recorded the largest losses of the day.

Currency

The naira closed flat at NGN386.00/USD and NGN463.00/USD at the I&E window and parallel market, respectively.

Money Market & Fixed Income

The overnight lending rate contracted by 450bps to 1.8%, as inflows from OMO maturities (NGN336.09 billion) and FGN bond coupon payments (NGN46.66 billion) came into the system.

Activities at the NTB secondary market was mixed, albeit with a bearish tilt, as market participants anticipated tomorrow’s PMA. Thus, average yield expanded slightly by 1bp to 0.5%. Across the curve, average yield was flat at the short and mid segments, but expanded at the long (+2bps) end, due to the sell-off of the 324DTM (+8bps) instrument. Elsewhere, average yield was flat at 0.5% in the OMO secondary market.

Trading turned bearish in the Treasury bond secondary market, as average yield expanded marginally by 1bp to 4.2%. Across the curve, average yield was flat at the short end, but contracted at the mid (-4bps) segment following buying interest in the MAR-2027 (-14bps) bond, while it expanded at the long (+5bps) end, as investors sold off the JUL-2045 (+7bps) bond.-With Cordros Research

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