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P a g e | 1
FINANCIAL MARKET ROUNDUP
Saturday, August 31, 2019
Global ‖ Domestic ‖ Equity market
…Financial Possibilities
GTI Equity Watch List
ASD
ASDSource: Getty Image
Source: CBN, GTI Research
52 53 54 55 56 57 58 59 60
Manufacturing PMI
Production Level
New Orders
Supplier Deliveries
Employment Level
Inventories
Manufacturing PMI
Jun'19 Jul'19 Aug'19
56 57 58 59 60 61
Non-ManufacturingPMI
Business Activities
New Orders
Employment Level
Inventories
Non-Manufacturing PMI
Jun'19 Jul'19 Aug'19
GLOBAL ECONOMY
G7 Summit concludes with no consensus on major global pressing issues
This week, we picked interest in the outcome of some of the key issues discussed at the recently
concluded G7 Summit in Biarritz, France. The annual event which was hosted this year by the French
president and the current head of the G7 forum, Emmanuel Macron, had in attendance, leaders from
other G7 member countries such as the U.S. President, Donald Trump; German Chancellor, Angela
Merkel; Prime Ministers of Canada – Justin Trudeau, Italy – Giuseppe Conte, Japan – Shinzo Abe,
United Kingdom – Boris Johnson, European Union Council President – Donald Tusk, and other guest
invitees.
While discussions were held on issues of global trade dispute, rising global warming, and tax evasion
by international tech companies among others, the response and action of the U.S. president, Donald
Trump, to the issues of trade tension and global warming suggests that rising uncertainties and conflict
of interest may persists in these two areas.
For instance, in the area of de-escalating the current trade tension between the U.S. and China, and
other affected trading partners, the U.S. president, Donald Trump insisted that “though China wants
to make a deal with the U.S., but whether or not the U.S. make a deal, it is going to be a great deal
for the U.S.” This position of the U.S. president which suggest that he’s less interested in reaching a
truce than winning the trade battle we believe will continue to weigh on investments’ sentiment in the
near-to-medium terms.
Likewise, the U.S. president was also reported to have “deliberately skipped” the Biodiversity and
Climate Protection session of the Summit. This development which points to the unrepentant stance of
the U.S. president against the 2015 Paris Accord on Climate Change Mitigation (on the basis that the
resolution in the accord will hinder manufacturing growth in the U.S.) implies that less progress is likely
to be achieve in the drive to mitigate the rising global warming condition.
Consequently, the outcome of this year G7 Summit deviated from the previous trends as the end of
the Summit’s communique only contain unanimous resolution on five of the many subjects discussed
throughout the sessions. With the U.S. president now set to host the 2020 edition of the G7 Summit,
we are of the view that more ripples are likely to be generated on trade issues in the coming months
so long the U.S. president sticks to his current grounds.
DOMESTIC ECONOMY
Nigeria PMI extend expansion in the month of August
Nigeria Manufacturing PMI expanded to 57.9ps in August of 2019 from 57.6ps in the previous
month. The figure points to the second consecutive month of faster expansion in PMI following a
slowdown between May (57.8pts) and June (57.4pts). The expansion in the PMI is the fastest since
February, 2019, and could be attributed to increased inventory build-up by importers of certain
items that fell under the new CBN forex restriction policy.
On the flipside, weak expansion was recorded in Production Level (58.7ps from 58.9ps), New Orders
(57.1ps from 57.2ps), and Employment Level (57.1ps from 57.3ps). This we believe reflect the true
broader economic position, as consumers’ purchasing power (to demand for more items) did not
improve in the said month.
Though we anticipate PMI expansion to be sustain in the coming month, we believe the trend may weaken
slightly as the new CBN policy on forex restriction to importers of some selected items weigh on the
expansion capacity of the manufacturing & non-manufacturing sectors. However, we believe seasonality
effect ahead of the festive period will support positive PMI in the remaining months of the year.
P a g e | 2
EQUITY MARKET
Market reversed previous week sentiment with a 1% w/w loss
The local bourse this week closed negative in three of the five trading sessions, as investors went
on profit taking in the aftermath of the 3.25% gain recorded in the previous. The selloff this week
was driven by profit taking on Seplat, Intbrew, Oando, Access, UBA, Dangcem and others.
Consequently, the overall market performance indices, NSE-ASI and Market Capitalization values
compressed by 0.99% w/w to close at 27,525.81 absolute points and ₦13.39 trillion respectively,
as against 27,800.17 absolute points and ₦13.52 trillion last week.
Of the five major sectors, three closed negatives on week-on-week valuation, led by Oil & Gas (-
10.76%), Banking (-3.46%), and Consumer goods (-0.63%), while Insurance and Industrial goods
sectors closed positive with gains of 1.15% and 0.34% respectively.
JOHNHOLT emerged top advancer this week, appreciating by 19.57% w/w, while SEPLAT led
the decliners’ park with a loss of 18.84% w/w.
Overall, a total turnover of 713.14 million shares worth ₦13.29 billion in 16,244 deals were
traded this week by investors on the floor of the Nigerian exchange in contrast to a total 2.34
billion shares valued at ₦15.79 billion that exchanged hands last week in 18,379 deals. A total
of twenty-five (25) equities appreciated in price this week, lower than forty (40) in the previous
week. Thirty-five (35) equities depreciated in price this week, higher than twenty-five (25) equities
in the preceding week, while a Hundred and nine (109) equities remained unchanged, higher than
a Hundred and one (101) equities recorded in the preceding week.
Market Outlook: Week ending September 6, 2019
Given the current lack of sustaining catalyst in the market, we anticipate continued profit taking in the
next trading week
FX, EXTERNAL RESERVE & CRUDE OIL MARKET
The Naira this week weakened against the USD at the Inter-bank, but strengthened against the
greenback at the I&E window. At the Inter-bank market, the Naira this week closed against the
USD at ₦307/$1 as against ₦306.95/$1 last week, while the pair gained 0.06% at the I&E
window to close at ₦362.93/$1 as against ₦363.14/$1 last week.
On the other hand, the Nigeria foreign reserves balance fell by $340 million w/w to close for this
week at $43.67 billion, while Brent benchmark crude oil price climbed slightly by $0.28 per barrel
to close for this week at $58.92 per barrel as against $58.64 per barrel last week Friday.
/
Source: NSE, GTI Research
Source: GTI Research
Source: FMDQ, CBN, Oilprice.com, GTI Research
₦0.46 ₦1.30 ₦0.63 ₦0.20
₦35.00
₦0.55 ₦1.45 ₦0.70 ₦0.22
₦38.00
19.57% 11.54% 11.11%10.00%
8.57%
0
10
20
30
40
50
60
70
80
Best Performing Stocks For The Week
Week Opening Price Week Closing Price % Change
₦490.00
₦1.07 ₦11.50 ₦8.30 ₦1.55
₦397.70
₦0.88 ₦9.75 ₦7.20 ₦1.37
-18.84% -17.76% -15.22% -13.25% -11.61%-100
0
100
200
300
400
500
600
700
800
900
1000Worst Performing Stocks For The Week
Week Opening Price Week Closing Price % Change
GTI Equity Watch List
P a g e | 3
DISCLOSURE
Conflict of Interest
GTI Securities Ltd and its sister companies within the GTI Group may execute transactions in securities of companies mentioned in this document
and may also perform or seek to perform investment banking services for those companies mentioned herein. Trading desks may trade, or have
traded, as principal on the basis of the research analyst(s) views and report(s).
Analyst Certification
Where applicable, the views expressed in this report accurately reflect the analysts' views about any and all of the investments or issuers to
which the report relates, and no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific
recommendations, views or corporate finance transactions expressed in the report.
Disclaimer
This report by GTI Securities Ltd is for information purposes only. While opinions and estimates therein have been carefully prepared, the
company and its employees do not guaranty the complete accuracy of the information contained herewith as information was also gathered
from various sources believed to be reliable and accurate at the time of this report. We do not take responsibility therefore for any loss arising
from the use of the information.
For enquires/research queries, please send an email to [email protected]
Analyst
Asimiyu Damilare – 0806 072 2944
Baanu Olaide – 0810 377 4799