Headlines news for the day

Investors Lose N82.83bn as NSEASI Dips by -0.40% to Open the Week Negative
Equities market closed today on a negative note, as NSEASI depreciated by -0.40% to close at 39,326.67 basis points as against +0.02% appreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -2.34%.
Market breadth closed positive as HONYFLOUR led 19 Gainers as against 18 Losers topped by CHAMPION at the end of today’s session – an unimproved performance when compared with previous outlook.
Market turnover closes positive as volume moved up by +29.27% as against +24.97% uptick recorded in the previous session. TRANSCORP, HONYFLOUR and HMARKINS were the most active to boost market turnover. ZENITHBANK and MTNN topped market value list.
ELLAHLAKES leads the list of active stocks that recorded impressive volume spike at the end of today’s session.
The Bears Take Centre-Stage as Average Yield Expands 27bps WoW to 4.95%
The Nigerian Treasury Bills (“NT-Bills”) secondary market traded on a bearish note throughout last week, as market participants exited positions across the curve given the subdued liquidity levels (sinking to N201.1bn negative on Tuesday) and ahead of Wednesday’s Primary Market Auction (“PMA”).
Consequent on this, average yields on secondary market NT-Bills expanded 27bps W-o-W to 4.95% with the 28-Apr-22 (+83bps W-o-W) and 12-May-22 (+89bps W-o-W) bills advancing the most and closed the week on a quiet note with minimal trading activities post-PMA.
At the PMA, the Apex Bank’s total offer of N157.2bn across the 91-, 182- and 364-Day tenors was met with strong demand, recording an overall subscription of N394.1bn (subscription ratio: 2.5x) and with the most demand centered on the 1-Year offer (subscription ratio: 3.3x). In addition, stop rates for the long offer recorded a further contraction of 55bps from the last auction to settle at 6.80%.

Please see below details of the PMA:

Auction Date 25-Aug-21 25-Aug-21 25-Aug-21
Allotment / Issue Date 26-Aug-21 26-Aug-21 26-Aug-21
Tenor (91-Day) (182-Day) (364-Day)
Offer (N) 3,123,978,000.00 32,705,313,000.00 121,376,867,000.00
Subscription (N) 4,843,952,000.00 24,170,251,000.00 365,106,158,000.00
Allotment (N) 3,537,952,000.00 22,864,251,000.00 280,934,106,000.00
Range of Bid Rates (%) 1.7500-8.0000 3.0000-9.5000.00 4.5000-10.5000.00
Stop Rates (%) 2.50 3.50 6.80
Previous Stop Rates (%) 2.50 3.50 7.35
Subscription Ratio 1.6x 0.7x 3.0x
Allotment Ratio 0.7x 1.0 0.8x
This week, we expect that the NT-Bills secondary market will sustain its bearish posture with no significant inflows expected during the week to offset pressured liquidity levels (despite the improvement to N137.3bn long as at Friday). Thus, we advise investors to position in relatively attractive maturities that advanced W-o-W across the curve and stay alert for prime corporate offerings – such as commercial papers.
Please see NT-Bills indicative rates below:
Maturity Tenor (Days) Rate (%) p.a. Yield (%) p.a.
25-Nov-21 87 3.25 3.28
13-Jan-22 136 3.95 4.01
31-Mar-22 213 4.85 4.99
26-May-22 269 6.40 6.72
30-Jun-22 304 6.96 7.39
14-Jul-22 318 7.26 7.75

FGN Bonds Update: Sustained Bullish Performance as Average Yields Dip 23bps to 11.15%
Last week, the FGN Bond secondary market maintained its bullish run, fuelled by a sustained flow of lost primary market bids. As a result, average yields across all maturities dipped 23bps W-o-W to 11.15% (from 11.38% the previous week).

While demand was recorded across the curve, short-term FGN Bonds enjoyed the most demand, inching 32bps southwards W-o-W, particularly on the MAR- 25 and JAN-26 maturities that dipped the most by 47bps and 48bps W-o-W respectively.

Going into the week, we expect a sustained pressure on average FGN Bond secondary market yields as investors continue to position in relatively attractive maturities given the perceived impending lower yield environment. Thus, we advise investors to trade cautiously in the secondary market while also looking out for attractive offers from corporates.

Please see below FGN Bonds secondary market indicative rates:
Bond Tenor (Years) Yield (%) Coupon (%) Implied Price (N)
Apr-23 2 8.30 12.75 106.73
Mar-24 3 8.30 14.20 113.24
Mar-25 4 9.60 13.53 111.61
Jan-26 5 9.70 12.50 109.80
Mar-27 6 10.35 16.29 124.57
Feb-28 7 10.55 13.98 115.81
Jul-34 13 11.30 12.15 105.66
Mar-36 15 11.70 12.40 104.82
Apr-37 16 11.55 16.25 133.61
Apr-49 28 11.65 14.80 125.81

Shell Energy rises from ashes of oil past
For years, Shell accounted for half of Nigeria’s oil output with operations straddling most of the Niger Delta. Many of the region’s students won Shell scholarships to prestigious engineering and medical colleges. But that was before the world became…
Travellers squeezed as COVID-19 impacts continue
What would have been a merry summer turned out boring for many travellers as governments of various countries continued to impose various levels of restrictions, discouraging travel and tourism across the world
Dangote’s $2bn petrochemical plant almost ready
Dangote’s two billion US dollar petrochemical plant located in Ibeju-Lekki, Lagos State will produce 77 different high-performance grades of polypropylene. Devakumar Edwin, group executive director, Strategy, Capital Projects, and Portfolio Development, Dangote Industries Ltd., disclosed this in a statement…
Transport infrastructure upgrade crucial to enjoy AfCFTA benefits
Experts in Nigeria’s transport space have recommended the need for an enhanced transport infrastructure, in order to drive the successful and effective implementation of the Africa Continental Free Trade Area Agreement (AfCFTA)
OPEC+ likely to keep oil output policy unchanged, sources say
OPEC+ is likely to keep its oil output policy unchanged when the group meets on Wednesday and continue with its planned modest production increase, three OPEC+ sources told Reuters.
GDP Report: Manufacturing Sector Sustains Growth in Q2 2021
For the second consecutive quarter, the Manufacturing sector’s real GDP grew by 3.49% y/y in Q2 2021, the highest growth since Q1 2015. Though this can be largely attributed to the low base in the prior year, there are indications that conditions for manufacturing are improving. Also, the readings for Manufacturing PMI rose to 46.6 in July from 45.5 in June 2021, showing a gradual recovery of output growth, though still below the 50-index point mark. Meanwhile, the continued efforts by the government to reposition critical sectors such as manufacturing on the path of growth have proved supportive.
We recall that the outbreak of the coronavirus negatively affected the manufacturing activities, touching a low of -8.78% in Q2 2020. This coupled with existing structural bottlenecks forced many businesses out of operations. Several companies saw demand for their goods plummet on the back of movement restrictions, and consumer behaviour turned towards the search for essential items. However, since the reopening of the economy, we believe gains from exports via open borders and increased credit supply to manufacturing businesses cut the sector some slack from the harsh effects of the pandemic.
As the economy continues to recover, we expect further improvement in the manufacturing sector. On the flip side, FX constraints, supply chain disruptions and weak disposable income are all factors that will continue to undermine growth in the sector. The need to boost the manufacturing sector is pertinent to achieving the country’s output projection and if structural constraints remain unaddressed, growth in the manufacturing sector will remain lackluster. Also, we observed that the negative impact of the oil refining subsector has continued to drag performance in the manufacturing sector with consolidated refining capacity at zero levels.
Average Prices of 1kg of Tomato Increased YoY by 36.45% to N414.83
Selected food price watch data for July 2021 reflected that the average price of 1 dozen of Agric eggs medium size increased year-on-year by 21.82% and month-on-month by 3.79% to N577.55 in July 2021 from N556.47…
Oil Stages Strong Recovery – OIR 270821
With fundamentals largely remaining the same as they were last week, oil prices nevertheless are poised to post sizable gains, with global benchmark Brent trading above $72 per barrel and WTI climbing to just south of $69 per barrel.
FCMB Partners Mercy Corps to Uplift 500,000 Farmers and the Vulnerable in North-East Nigeria
About 500,000 farmers and vulnerable people in Nigeria’s North-East zone can now access farming friendly and demand-driven financial services. It is the result of First City Monument Bank’s (FCMB) partnership with Mercy Corps, a frontline international aid organisation.
July 2021 Food Prices and Insecurity: A Tale of Two-way Causation?
The rising prices of food staples in the country is pushing many Nigerian households below the poverty line. Based on the selected food price watch data for July 2021 released by the National Bureau of Statistics (NBS), major consumer staples showed substantial increases month on month and year on year (between July 2020 and July 2021).
Diaspora Remittances Hit $34bn as Nigerian Migrant Workers Top List
The Naira4Dollar policy of the Central Bank of Nigeria (CBN) may have begun to yield dividends as remittances from Nigerians in the Diaspora now stand at an average of $34 billion annually, THISDAY has learned.
SERAP Sues FG, Seeks Details of ‘Payment of N729bn to Poor Nigerians’
Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit asking the Federal High Court in Lagos “to compel the Federal Government to disclose details of proposed payments of N729bn to 24.3 million poor Nigerians, including the mechanisms and logistics for the payments…
FG Has Recovered N49bn Debt from Contractors Through Project Lighthouse
Zainab Ahmed, minister of finance, budget, and national planning, says the federal government has recovered N49.7 billion debt owed to it by contractors and other third parties. The recovery, the minister said it was through Project Lighthouse, out of N5.2 trillion worth of debts.

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First Ideas Limited is an investment and financial advisory company established in 1994 to provide advisory services to high net worth individuals, trust funds, financial institutions and medium sized companies in growth sectors.

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