FeaturedMarket Update

Equities Market Dived Further North as NBS Reports Uptick Headline Inflation

Treading further north, equities trading on the floor of The Nigerian Stock Exchange added a whooping 107Bpts to its trading points and rounded up trade at 30,460.68 from 30,137.53. Safe NSE-Banking and NSE-Oil&Gas indexes that shed points, all other observed market indices ended in the green zones. Thus, Week to Date market gain increased to 211Bpts while the total lost point in the month of January reduced to 309Bpts. See the index movement table for details.

Value gained by the market capitalization of the listed equities during today’s trading activities was N120.506 billion, same as 107Bpts above the opening value.  Meanwhile, trading activities for the day produced 24 ADVANCERS and 16 LAGERS. NSEASI Year to Date loss is now 309% while the Market Capitalization Year to Date loss stood at N351.659 million same as 3.09% below the year’s opening value.

The National Bureau of Statistics had reported that in December 2018, Headline Inflation increased by 11.44% YoY. This is 0.16% higher than the rate reported in November 2018 (11.28%). Note that December is a period with higher festive spending which invariably pushed up demand in the economy; further enhancing the spending is the increase in FAAC which increase the liquidity with both state and federal agencies. Nevertheless, the fact that the inflation changed direction after a prolong downtrend is sign that the rate is now trending. In our opinion, an uptick in the rate at a time when the US inflation rate is declining and US Fed is more committed to interest rate hike, increases the chances of Naira depreciation against the dollar. This and other factor we believed shall be observed in the next MPC meeting.

As at the time we compiled this report, Brent Crude trades at $60.38/bbl having gained 0.26% below the last close price.

At the interbank rate today, the Naira closed at N306.35 against the USDollar representing 16Bbpts gain against last close.  See below table for BDC rates by four major locations within the country. Meanwhile, the I&E FX Window started from N363.77 traded as high as N365.70 before rounding up at N363.05, having transacted a total of $259.02 million through the day. Please note that, margin between the close and open value is an equivalent of 15Bpts gain. We are of the opinion that the FX-Market will trade within same range tomorrow.

In the money market, the Overnight (O/N) rate closed at 19.75%, same as 4.42% below the previous closing position. Meanwhile, Open Buy-Back (OBB) rate ended at 18.17%, that is, 3.50% below the previous close. We are of the opinion that the money market will maintain this range on the next business day. Safe Trade.

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