Equities Market –
The equity market continues to push higher as traders remain optimistic ahead of the Q2 earning season. The benchmark index made it 9 consecutive sessions of gains as it added 0.41% to end the session at 33,436.61 points as the year-to-date gain grew to 24.42%.
General market breadth was mixed. On a positive note, the consumer goods index rallied by 1.43% off the back of interest in the likes of UNILEVER (4.98%), DANGSUGAR (4.39%), NESTLE (1.77%), PZ (1.69%) and NB (1.10%). The industrial index added 0.39%, lifted by BETAGLAS (4.93%) and DANGCEM (0.38%). On the other hand, the insurance index plunged by 1.70% off the back of losses in MANSARD (-4.93%), CUSTODYINS (-4.76%) and CONTINSURE (-4.55%). The oil and gas index lost 0.55%, weakened by the likes of FO (-4.20%) and OANDO (-0.29%). The banking index was down 0.32%, weighed down by the likes of ZENITHBANK (-1.91%) and ACCESS (-0.82%).
General market breadth was positive as the session registered 25 gainers and 19 losers. The top three gainers were HONYFLOUR (8.29%), UBN (5%) and JBERGER (4.99%) while the top three losers were MAYBAKER (-5.02%), MANSARD (-4.93%) and CUSTODYINS (-4.76%). Investors traded 2.40 billion shares worth ₦21.61 billion—2.09 billion shares of UBA valued at ₦19.76 billion traded.
Wema Bank Plc released its H1 earnings today which showed moderate profit growth. Net interest income edged down by 0.47% y/y to ₦8.48 billion, non-interest income jumped 22% y/y to ₦5 billion while the bank reported an impairment charge of ₦88.41 million compared to a write-back of ₦61.52 million a year ago. OPEX rose by 5.09% y/y to ₦11.97 billion while profit-after-tax increased by 11% y/y to ₦1.22 billion—stock closed flat on the day at 55 Kobo.
Given the recent winning streak, the market looks due for a bit of a correction as valuations look a bit frothy at the moment. The Q2 numbers need to come in strong to justify current pricing and this is not a certainty.
Money Market & Fixed Income –
The average inter-bank repo rate dropped another 173bps to 8.36% as liquidity looks to have improved of late following the ₦90 billion OMO inflow last Thursday. The FGN debt market performance was mixed. The average T-Bill yield declined by 9bps to 19.93% as yields fell across most maturities. On the other hand, the average bond yield was up 4bps to 16.77% as traders offered the mid-end of the curve; performance at the short-end of the curve was mixed while maturities at the long-end were little-changed.
Foreign Currency –
The Naira plunged by 2.97% against the US Dollar at the inter-bank market to ₦315/$. At the I & E window, the Naira lost 0.38% against the US Dollar to ₦363.57/$. The Naira was unchanged against the US Dollar at the parallel market to end trading at ₦367/$.