Daily Market Roundup – Wednesday, 12th January, 2022

Dear Valued Investor,
Equity Market: Today, the bulls re-emerged to lift the market up by 1.71%, inspired by the announcement of the 2 nd Tranche of Dangote Cement Plc’s share buy-back. As a result, Dangote Cement gained 6.18% to lead the charge of the bulls, supported by MTNN’s 2.15% gain. Elsewhere, profit takers stepped in to weaken the BUA Foods frenzy, gaining 2.16% after six consecutive sessions of gaining 10%. Year-to-date gain of the market improved to 4.43%.Money Market: Today, system liquidity recovered from its previous deficit position to close at N47.41bn surplus, despite the surge in demand for Repo instruments. Consequently, inter-bank rates eased marginally by 75bps, to close at 15% levels. However, we expect rates to remain elevated as the market funds for NTB auction settlement.

Fixed Income: Today, the DMO released its bond issuance calendar for Q1-2022, wherein it raised the range of amount on Offer from N50-60bn in Q4’21 to N70-80, but reduced the maturities on offer to 10 and 20 years. As expected, the DMO had a few tricks up its sleeves, all in a bid to spark bullish sentiment in the secondary market, which in-turn helps to ease funding cost at the upcoming auction on 19th January. The DMO greeted the market with a new issue of 2042 while excluding 2037 and 2050 maturities. We believe this will spur buy interest from short sellers seeking to cover their position.

At today’s primary market auction, rates closed higher by 50bps for 364-day papers after six consecutive auctions of decline, this is consistent with the CBN’s position at the opening auction in 2021, signalling a possible upward trend. Also, stop rate for 91-day tenor cleared flat at 2.50% while 182-day bills dipped by 5bps to 3.50%. Elsewhere, the NTB secondary market closed on a positive note as activities picked on renewed interest in the Jul-22 bills. As a result, the yield shed 4bps to close at 4.54%, while OMO bills closed at 5.52%.

FX Market: At the I&E window, activity levels increased by 122.89%, as daily turnover increased to $172.99m. Also, the Naira appreciated by 5k (0.12%), closing the session at $/N416. External reserves held firm at $40.5bn.

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