May 9, 2017/Cordros Research

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EQUITIES

• The equities market remained bullish for the eighth successive session in a row, heralding its longest gaining streak this year. Today’s gain was driven by demand for banking and oil & gas stocks. The All Share Index gained 1.28% to close at 26,756.21 points.

• Today’s strong performance increased the Month-to-Date gain to 3.87% and reduced the Year -to-Date loss to 0.44%.

• The Banking (+2.18%) index recorded the largest gain, following price appreciations by ZENITHBANK (+1.17%), GUARANTY (+1.66%), and STANBIC (+0.84%). Likewise, the Consumer Goods (+0.69%), Insurance (+0.67), and Oil & Gas (+1.20%) indices advanced, owing to demand for NB (+1.54%), NEM (+4.44%), and OANDO (+10.14%) respectively. On the flip side, the Industrial Goods (-0.30%) index shed weight, on the back of selloffs in WAPCO (-2.22%).

• Market breadth improved, with 34 gainers versus 8 losers. Total volume traded increased by 101.48% to 539.23 million shares, valued at N2.82 billion, and exchanged in 4,519 deals.

• We expect the positive trend to continue in tomorrow’s session.

CURRENCY

• It was disclosed that the apex bank further injected USD81.2 million in the interbank market, providing USD 44 million for invincible transactions and USD37.2 million to meet demand from SMEs’.  That said, the naira strengthened against two of the currencies we track. The GBP/NGN (+0.89%) and EUR/NGN (+0.22%) strengthened to N410.11 and N342.92 respectively, while the USD/NGN (-0.15%) weakened to N305.65. In the parallel market, the USD/NGN (+0.26%) and GBP/NGN (+0.61%) strengthened to N390 and N492, while the EUR/NGN was flat at N425. Meanwhile, the USD/NGN (-0.54%) weakened to N382.37 in the IEFX market.

FIXED INCOME AND INTERBANK

• The overnight rate contracted by 234 bps to 15.58%, despite today’s OMO auction wherein the CBN sold N17.32 billion across the 163-DTM (N215.6million) and 359-DTM (N17.1 billion) bills respectively.

• Proceedings ended on a bullish note in the treasury bills space, with average yield contracting by 2 bps to 18.39%. Sentiments were mixed across the curve, with demand occurring at both the short (-11 bps) and long (-2 bps) ends, as investors bought into the 15-JUN-17 (-109 bps) and 30-NOV-17 (-18 bps) maturities respectively. Yield at the mid (+6 bps) segment expanded as investors sold-off the 2-NOV-17 (+44 bps) bill.

• Likewise, investors were upbeat in the bond market, with average yield contracting by 5 bps to 16.85%. Yields contracted at the short (-12 bps) and mid (-4 bps) ends of the curve, following demand for the JUL 2017 (-34 bps) and Jan 2022 (-8 bps) bonds respectively. At the long (+1 bp) end, yield was modestly pressured, as investors sold-off the JUL 2034 (+5 bps) maturity.