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Markets Wrap: Equities bullish again as MTNN, AIRTELAFRI and Tier 1 bank stocks gain, naira sells N470/$ flat at parallel market

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THUR, JULY 16 2020-theG&BJournal-Sentiments remained positive in the domestic bourse, as the All-Share Index advanced by 0.8% to 24,330.06 points – the biggest gain since 26th June, 2020. The positive performance was spurred by gains in market large caps MTNN (+2.6%), AIRTELAFRI (+2.4%) and Tier 1 bank stocks. Thus, Month-to-Date and Year-to-Date losses moderated to -0.6% and -9.4%, respectively.

The total volume of trade decreased by 0.4% to 207.42 million units, valued at NGN1.70 billion. STERLNBANK was the most traded stock by volume at 60.08 million units while AIRTELAFRI was the most traded stock by value at NGN104.70 million.

Analysing by sector, the Banking (+1.0%) and Insurance (+0.1%) indices recorded gains, while the Consumer Goods (-0.5%) and Oil & Gas (-0.3%) indices declined. The Industrial Goods index was flat.

Market sentiment, as measured by market breadth, was positive (1.1x), as 17 tickers gained, relative to 16 losers. IKEJAHOTEL (+9.8%) and PRESCO (+9.3%) were the top gainers of the day, while NAHCO (-9.2%) and UNITYBNK (-9.2%) recorded the largest losses.

Currency

The naira weakened at the I&E window by 0.4% to NGN388.00/USD while it was flat at NGN470.00/USD at the parallel market.

Money Market & Fixed Income

The overnight lending rate contracted by 737bps to 3.4%, as inflow from OMO maturities (NGN69.55 billion) improved system liquidity.

The NTB secondary market was bullish, as market participants covered for lost bids at the PMA. Thus, average yield contracted by 9bps to 1.8%. Across the curve, yield contracted at the short (-10bps), mid (-14bps) and long (-3bps) segments, following interest in the 56DTM (-60bps), 182DTM (-29bps) and 196DTM (-15bps) instruments, respectively. Similarly, average yield contracted by 3bps to 5.7% at the OMO secondary market.

Trading in the Treasury bond secondary market was bullish, as average yield contracted by 5bps to 7.6%. Across the curve, yield contracted at the short (-6bps) and long (-6bps) ends, as investors demanded the APR-2023 (-31bps) and MAR-2036 (-15bps) bonds, respectively, while they expanded slightly at the mid (+1bp) segment, as investors sold off the FEB-2028 (+2bps) bond.

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