April 26, 2017/Cordros Research

Click here to download full PDF Report

• The market closed lower, following major selloffs in industrial goods stocks. The All Share Index shed 0.77% to close at 25,620.94 points.

• Today’s loss reduced the Month-to-Date gain to 0.41% and increased the Year-to-Date loss to 4.66%.

• Losses recorded by DANGCEM (-3.64%) and BETAGLAS (-0.86%) weighed on the Industrial Goods (-1.61%) index. Asides that, all other sectoral indices recorded gains, with the Oil & Gas (+1.18%) index advancing the most, owing to demand for OANDO (+6.11%), SEPLAT (+1.23%), and FO (+0.40%). Likewise, the Banking (+0.59%), Insurance (+0.38%), and Consumer Goods (+0.22%) indices closed higher respectively, driven by interest in GUARANTY (+0.58%), NEM (+4.76%), and NB (+0.11%) shares.

• Market breadth was positive, with 24 gainers versus 10 losers. The total volume traded increased by 100.68% to 255.73 million shares, valued at N1.67 billion, and exchanged in 2,845 deals.

• Corporate Releases: Q1-2017 earnings: GUARANTY (PAT: +61.93% y/y), NEM (PAT: -73.62% y/y), LASACO (+5.43% y/y), and LIVESTOCK (PAT: +658.08% y/y).

• We expect market performance to further reflect investor reaction to Q1-2017 earnings.

CURRENCY                     

• The apex bank sold USD96.37 million in a forward auction and USD25 million at the Investors & Exporters’ window yesterday. Today, the naira appreciated against the pound (+1.48%) and euro (+0.50%) to N391.95 and N332.87 respectively, while it was flat against the dollar at N305.90. In the parallel market, the naira weakened against the pound (-1.02%) and euro (-1.20%) to N495 and N420 respectively, while it remained unchanged against the dollar at N388. Meanwhile, at the Investors & Exporters’ window, the NGN/USD (-1.45%) weakened to N380.39.

FIXED INCOME AND INTERBANK

• The money market rate contracted by 8.09% to 25.58%, following cash injections from monthly budgetary allocation to the three tiers of government worth N407.81 billion. The overnight rate was less sensitive to the N68.91 billion mopped up by the apex bank across the 183-day (N1.19 billion vs. N5.00 billion offered) and 358-day(N67.72 billion vs.N20.00 billion offered) maturities.

• The treasury bills market closed on a bullish note, with average yield contracting by 6bps to 18.18%, as expected improvement in liquidity position continued to enthuse investor appetite. Yields contracted across board — short (-14 bps), mid (-1 bp), and long (- 5 bps) segments — driven by demand for the 25-MAY-17 (-138 bps), 2-NOV-17 (-13 bps), and 15-FEB-18 (-36 bps) bills respectively.

• Conversely, the bonds market closed on a bearish note, albeit modestly, with average yield expanding 1 bp to 16.51%. Yield at the short (-1 bp) end of the curve contracted, following demand for the JUL 2017 (-11 bps) bond. On the other hand, yields at the mid (+1 bp) and long (+2 bp) segments came under pressure, as investors sold-off the FEB 2020 (+7 bps) and MAR 2027 (+21 bps) maturities respectively.