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Local equities rebound amid bullish activities

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L – R: Shows Pai Gamde, Acting Head, Corporate Services Division, NSE; Stephanie Busari, Supervising Producer – Africa, CNN; Oscar Onyema, CEO NSE; Richard Quest, International Business Correspondent, CNN; Ade Bajomo, Executive Director, Market Operations and Technology, NSE; Haruna Jalo-Waziri, Executive Director, Capital Markets Division, NSE and Tinuade Awe, General Counsel and Head of Regulation, NSE at the Closing Gong Ceremony on Thursday at the Exchange.

April 27, 2017/Cordros Research

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EQUITIES

  • The equities market pared yesterday’s loss, following demand for banking and oil & gas names. The All Share Index advanced by 0.52% to close at 25,753.00 points.
  • Today’s performance increased the Month-to-Date gain to 0.93% and reduced the Year-to-Date loss to 4.17%.
  • The Banking (+1.68%) index recorded the largest gain, as positive earnings (we highlight GUARANTY, FIDELITY, and STANBIC) in this space stoked investor appetite. Specifically, the shares of the listed names appreciated by 2.23%, 2.41% and 6.75% respectively. Likewise, gains recorded in OANDO (+1.22%) bolstered the Oil and Gas (+0.12%) index. On the flipside, the Consumer Goods (-0.10%), Industrial Goods (-2.52%), and Insurance (-0.62%) indices were pressured, on the back of selloffS in UNILEVER (-9.72%), WAPCO (-5.83%), and CONTINSURE (-4.92%).
  • Market breadth was positive, with 22 gainers versus 15 losers. Total volume traded increased by 45.37% to 371.76 million shares, valued at N2.81 billion, and exchanged in 3,627 deals.
  • We expect the market to close on a positive note and consolidate gains this week.

CURRENCY

  • It was disclosed that the apex bank sold USD185.86 million at the interbank window yesterday on the spot (USD3.14 million), and  through forward (USD182.72 million) contracts. Today, the LCY weakened against the pound (-0.81%) and euro (-0.20%) to N404.09 and N332.97 respectively, while strengthening against the dollar (+0.02%) to N305.85 at the interbank window. In the parallel market, the naira weakened against the dollar (-0.52%) to N390, while it strengthened against the euro (+1.19%) to N415, and closed flat against the pound at N495. Meanwhile, at the Investors & Exporters’ market, the naira strengthened by 0.35% against the dollar to N379.04.

FIXED INCOME AND INTERBANK

  • The overnight rate crashed to 5.42%, from yesterday’s close of 25.58%, following cash injection from the maturity of (1) the APR 2017 bond, totaling N516.38 billion, and (2) OMO bills, worth N52.95 billion. Suffice to say that these more than offset the impact of today’s  N93.17 billion mopped up by the apex bank across the 182-day (N13.25 billion vs. N20.00 billion offered) and 364-day (N79.92billion vs.N50.00 billion offered) maturities.
  • Trading in the secondary market was mixed, closing with a (modest) bullish bias, further reflecting demand response to improved liquidity position. Average yield contracted by 1 bp. Yield contraction was most noticeable at the mid (- 7 bps) end of the curve, as the 21-SEP-17 (-40 bps) and 28-SEP-17 (-27 bps) bills were the toast of investors. Yield at the short (+9 bps) and long (+1 bp) segments were pressured, as investors sold-off the 4-MAY-17 (+95 bps) and 2-NOV-17 (+16 bps) bills respectively.
  • Investors remained down beat in the bond market, with average yield expanding by 5 bps to 16.57%. Selloffs occurred at the mid (+4 bps) and long (+8 bps) ends of the curve, driven by the JUL 2021 (+12 bps) and APR 2037 (+24 bps) bonds respectively. Conversely, yield at the short (-1 bp) end contracted following demand for the MAY 2018 (-9 bps) maturity.

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