MON, JAN 27 2020-theG&BJournal-In today’s trading, market sentiment waned, as the impact of CBN’s hike In Cash Reserve Ratio (CRR) by 500bps to 27.5% weighed down the Banking stocks. Consequently, the NSE All-Share Index pared by 0.26% to 29,552.99, as the Year-to-Date return moderated to 10.10%.
The total volume of trades increased by 140.59% to 444.04 million units, valued at NGN3.35 billion and exchanged in 4,306 deals. VERITASKAP was the most traded stock by volume at 226.56 million units and ZENITHBANK was the most traded by value at NGN988.96 million.
On sector performances, the Banking (-1.19%) index recorded the largest decline, with the Oil & Gas (-0.04%) following suit. Conversely, the Insurance (+0.51%), Consumer Goods (+0.21%) and Industrial Goods (+0.07%) indices closed positive.
Market sentiment, as measured by market breadth, was positive (1.1x), as 14 tickers recorded gains while 13 tickers recorded declines. NAHCO (+10.00%) and NPFMCRFBK (+9.73%) topped the gainers’ list, while UNILEVER (-9.97%) and ETERNA (-9.52%) recorded the largest declines.
CURRENCY
The naira traded flat against the US dollar at NGN362.00/USD in the parallel market but weakened by -0.12% to NGN362.94/USD at the I&E FX window.
MONEY MARKET & FIXED INCOME
The overnight lending rate expanded by 6.17ppts to 10.50%, as the system squeezed, following provisioning for FX wholesale, Invisibles and SMEs auctions.
Following CBN’s hike in CRR, the NTB market saw bearish sentiments, as investors traded cautiously. Consequently, average yield expanded marginally by 7bps to 3.60%. Yield expanded by at the short (+7bps) end of the curve, following sell-off of 66DTM (+122bps) bill. On the flip side, buying interest in 185DTM (-8bps) and 213DTM (-5bps) bills, led to yield contraction at the mid (-2bps) and long (-3bps) segment of the curve, respectively.
The treasury bond secondary market was bullish, as the average yield across all instruments contracted by 24bps to 9.90%. Yields contracted across the short (-50bps), mid (-5bps) and long (-16bps) segment of the curve, following buying interest in the JUL-2021 (-94bps), MAR-2027 (-28bps) and JUL-2034 (-37bps) bonds, respectively.-Courtesy Cordros Securities.
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