May 15, 2017/Cordros Research
EQUITIES
- The market closed on a bearish note, following profit taking across all sectorial indices. The All Share Index shed 2.41% to close at 27,513.69 points.
- Today’s loss reduced the Month-to-Date and Year-to-Date gains to 6.81% and 2.38% respectively.
- The Oil & Gas (-3.84%) index recorded the largest loss, as traders locked in profits in SEPLAT (-5.00%), FO (-5.00%), and OANDO (-9.63%) after the previous week’s rally. Likewise, the Banking (-3.27%), Insurance (-1.03%), Consumer Goods (-3.66%), and Industrial Goods (-1.16%) indices respectively closed lower, as ZENITHBANK (-5.68%), GUARANTY (-3.30%), MANSARD (-4.88%), CUSTODYINS (-4.11%), NESTLE (-4.43%), NB (-4.92%), WAPCO (-1.25%) and CCNN (-0.20%) were sold-off.
- Market breadth was negative, with 10 gainers versus 41 losers. Total volume traded declined by 36.89% to 670.96 million, valued at N7.91 billion, and exchanged in 4,034 deals.
- We expect profit-taking to continue in tomorrow’s session.
CURRENCY
- It was earlier disclosed that the apex bank would sell USD100 million to end users in a special wholesale spot and forwards auction today, however, the outcome was unknown at the time of writing. That said, the LCY weakened against two of the currencies we track. The GBP/NGN (-0.10%) and EUR/NGN (-0.38%) weakened to N409.92 and N345.92 respectively, while the USD/NGN closed flat at N305.60. In the parallel market, the USD/NGN (+1.03%) strengthened to N386, while the GBP/NGN and EUR/NGN closed flat at N495 and N420 respectively. Meanwhile, the USD/NGN shed 0.13% to close at N382.94 in the IEFX market.
FIXED INCOME AND INTERBANK
- The overnight rate expanded by 23.83% to 53.33%, as the Central Bank sold (1) N6.82 billion worth of 185-DTM (N2.25 billion) and 353-DTM (N4.57 billion) OMO bills to investors and (2) FX to commercial banks via forward contracts.
- The T-bills market closed on a bearish note, with average yield expanding by 12 bps to 18.63%. Sell-off was broad-based (short + 27 bps, mid +15 bps, and long +1 bp) with the 8-JUN-17 (+92 bps to 18.10%), 31-AUG-17 (+77 bps to 18.86%), and 15-FEB-18 (+4 bps to 18.56%) bills respectively recording notable yield expansion.
- Likewise, investors were downbeat in the bond market. Average yield expanded by 3 bps to 16.86%, primarily driven by selloffs at the short (+9 bps) end of the curve, in particular, the JUL-2017 (+72 bps to 20.06%) maturity, which recorded the largest yield expansion. Demand was modest at the mid and long (-1 bp apiece) segments, as investors bought the JUL- 2021 (-1 bp to 16.21%) and JAN 2026 (-4 bps to 16.09%) bonds respectively.
