Chapel Hill Denham Forecasts Tighter Liquidity as NSE Opens Negative
In the Nigerian Stock Exchange, Trading activities commenced the week on a negative note, sustaining the bearish run from last week. Chapel Hill Denham however said it expects financial system liquidity to be tighter this week, as no major maturities are expected.
Meanwhile, the all-share index shed 29 basis points bps to close at 24,753.89 points. Consequently, the year to date loss printed at 7.78% compared to 7.51% last Friday. Similarly, the Market Capitalisation fell by 29bps to close at N12.91 trillion.
Today’s top gainers were Japaul Oil (+8.70%), Nestle Nigeria (+7.72%) and Fidson Healthcare (+7.49%) after closing at 25kobo, N1,179.00 and N3.30 respectively.
The losers’ table was led by Neimeth Pharmaceuticals (-9.74%), Cutix Plc (-9.09%), Honeywell Flourmills (-8.33%) and Stanbic IBTC (-8.33%) after closing at N1.39, N1.60, 99kobo and N30.25 respectively.
Sentiments were weak across the NSE sector indices as the consumer goods index emerged as the lone gainer, after increasing by 2.10%. The industrial, insurance, banking and oil & gas indices lost 1.50%, 87bps, 60bps and 53bps respectively.
Market activity opened the week on a soft footing, with total volume traded contracting by 28.62% to 125mn units, valued at N1.32bn (-34.41%).
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The most actively traded stocks were Japaul Oil (14mn units, valued at N3.30mn), Guaranty Trust Bank (11mn units, valued at N260.46mn) and Zenith Bank (10mn units, valued at N168.81mn) and after accounting for 10.92%, 9.10% and 8.36% of total volume traded respectively.
Also, Chapel Hill Denham’s Women Investment Fund (WIF) gained 3bps while the Paramount Equity Fund (PEF) lost 35bps.
In the money market, interbank funding rates remained elevated at the start of the trading week due to provisioning for the wholesale FX auction.
Nonetheless, funding rates eased marginally, as the OBB and OVN rates moderated to 14.50% and 15.75% respectively (from 15.17% and 16.67% last Friday).
Financial system liquidity opened the week lower at N70.12bn compared to last Friday’s open of N613.26bn.
Chapel Hill Denham said it expects financial system liquidity to be tighter this week, as no major maturities are expected.
Meanwhile, the fixed income market recorded a largely positive performance on Monday. In the secondary T-bills market, the average rate opened the week unchanged at 2.54%.
However, in the open market operation (OMO) market, average discount rates on benchmark bills eased by 5bps to 4.58%. Analysts at Chapel Hill Denham attribute this to buy-ins on short (-20bps to 3.61%) and long (-3bps to 5.25%) DTMs.
In the secondary bond market, trading sentiments remained bullish as the average yield on benchmark bonds declined by 14bps to 8.82%. This was on buying sentiment across all tenors: short (-40bps to 5.94%), mid (-1bp to 8.82%) and long (-7bps to 10.97%) DTMs.
Elsewhere, the Naira exchange rate appreciated by 50kobo (+13bps) at the I & E window to N386.00. It was, however, unchanged at N361.00 and N455.00 at the official and parallel market windows, respectively. The external reserves stood at US$36.32 billion having dropped by 0.76% month to date as of 18 June 2020.
Chapel Hill Denham Forecasts Tighter Liquidity as NSE Opens Negative.
