Market/Economic Insight (Monday June 3rd to Friday June 7th 2019) |

The performance of the Nigerian Equity Market remained bearish last week with the index (NSE ASI) trending downward by 2.05% WTD to close at an index level of 30,432.13 and Market capitalization of N13.40 trillion.

The Sectoral Performance remained negative driven mainly by profit-taking seen across sectors throughout the week with the Oil/Gas Sector recording the highest decline, down by 5.15% owing to significant price depreciation in TOTAL (-7.41%) and SEPLAT (-6.64%).

During the week, the Federal High Court stepped-in to intervene in Oando Saga as an injunction restraining Securities and Exchange Commission (SEC) from executing its sanction on Chief Executive Officer and its deputy was issued.

In the global space, selected markets closed on a bullish note with the exception of Chinese’s CSI 300 which decline by 1.79%. The US market closed on a positive note as investors anticipated interest rate cut after the less than expected jobs report was released during the week. Other factors that shaped markets include US-China and US-Mexico trade war.

Money Market Rate Weekly Closing Rate

The average money market rate rose by 6.61% to settle at 11.15% from 4.54% in the previous week due to contraction in system liquidity during the week, which is estimated to have closed the week at cN270bn from cN410bn in the previous week as the Central Bank of Nigeria (CBN) issued OMO two times during a 3-day holiday-shortened week.

The Overnight rate (OVN) and Open Buy Back (OBB) rose to 11.43% and 10.86% from 4.93% and 4.14% respectively in the previous week. Major Outflow for the week included: OMO Sales of c157.98 bn on Thursday and cN317.94 bn on Monday; Weekly Wholesale, Invisible and SME FX auction of $210 mn and biweekly FX auction on Friday, while major Inflow for the week included: OMO Maturity of cN177bn.

Week Ahead: 10 – 14 June 2019

The National Bureau of Statistics is set to release the following reports:

Coronation Research

  • Foreign Trade in Good Statistics (Q1 2019) on Monday, 10 June 2019.
  • May Price Watch for Petrol on Saturday, 15 June 2019.

The following Annual General Meeting is set to hold this week:

  • Wapic Insurance Plc at Federal Palace, Victoria Island, Lagos on Monday, 10 June 2019.
  • Oando Plc at Zinnia Hall, Eko Hotels and Suites, Lagos on Tuesday, 11 June 2019. (Note that this AGM has been suspended by the Securities and Exchange Commission)
  • Union Bank of Nigeria Plc at Civic Centre, Lagos on Tuesday, 11 June 2019.
  • NASCON Allied Industries Plc at Civic Centre, Lagos on Thursday, 13 June 2019.
  • The Economic and Financial Crimes Commission is set to
    hold the inauguration Anti-Corruption Summit.

Top Stock Watch for the week: 10 – 14 June 2019

Our top stock watch for the week remained OANDO with a 4.76% price depreciation since the beginning of the recent saga with the Securities and Exchange Commission.
Over the last five trading sessions:
UBA remained unchanged to close at N6.25 with a YTD price return of -18.83%. Recommendation: We maintain a buy rating on this stock.
ZENITHBNK rose by 1.24% to close at N20.35 with a YTD price return of -11.71%. Recommendation: We maintain a buy rating on this stock.



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