Home Companies&Markets Markets Wrap: NTB yield expands 6bps to 2.1%, equities rebound by 0.3%...

Markets Wrap: NTB yield expands 6bps to 2.1%, equities rebound by 0.3% and naira trades flat at both markets

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TUE, JULY 07 2020-theG&BJournal-The domestic equities market closed positive today, as investors’ interest in AIRTELAFRI (+3.7%), BUACEMENT (+2.5%) and some Tier 1 bank names, spurred the gain witnessed in the market. Precisely, the All-Share Index advanced by 0.3% to 24,097.48 points. Accordingly, Month-to-Date and Year-to-Date losses moderated to -1.6% and -10.2%, respectively.

The total volume of trades decreased by 18.0% to 155.53 million units, valued at NGN2.60 billion and exchanged in 4,060 deals. GUARANTY was the most traded stock by volume at 19.72 million units while MTNN was the most traded stock by value at NGN1.18 billion.

On sectors, the Insurance (-2.8%), Consumer Goods (-0.5%) and Oil & Gas (-0.02%) indices recorded losses, while the Banking (+0.9%) and Industrial Goods (+0.1%) indices gained.

Market sentiment, as measured by market breadth, was negative (0.9x), as 18 tickers declined, relative to 17 gainers. OKOMUOIL (-10.0%) and MRS (-9.8%) were the top losers of the day, while REDSTAREX (+9.8%) and WAPIC (+6.1%) recorded the largest gains.

Currency

The naira was flat at the I&E window and parallel market at NGN386.50/USD and NGN461.00/USD, respectively.

Money Market and Fixed Income

The overnight lending rate expanded by 50bps to 21.5%, in the absence of any significant inflows into the system.

The NTB secondary market was bearish, as average yield expanded by 6bps to 2.1%. Across the curve, yields pared at the short (-1bp) end, due to demand for the 9DTM (-3bps) instrument, while they expanded at the mid (+16bps) and long (+5bps) segments, following sell-offs of the 100DTM (+20bps) and 205DTM (+10bps) instruments, respectively. Similarly, average yield expanded by 12bps to 5.2% at the OMO secondary market.

Trading in the Treasury bond secondary market was bullish, as average yield contracted by 12bps to 7.9%. Across the curve, yield contracted at the short (-38bps) end, as investors demanded the APR-2023 (-131bps) bond, while they expanded at the long (+6bps) end following sell-offs of the MAR-2036 (+15bps) bond; yield at the mid segment was flat.

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