May 17, 2017/Cordros Research

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EQUITIES

• The market fired on, with the All Share Index gaining 1.05% to close at 27,900.44 points.

• Today’s gain was on the back of broad-based demand across the various sectors, driving the Month-to-Date and Year-to-Date gains higher to 8.31% and 3.82% respectively.

• Investors stuck to Consumer Goods (+1.99%) and Banking (+1.71%) names. In particular, the shares of NESTLE (+3.12%), NB (+2.07%), GUARANTY (+4.07%), and ACCESS (+2.93%) were in strong demand.  Likewise, the Oil & Gas (+1.56%) and Insurance (+0.04%) indices appreciated, owing to demand for OANDO (+9.90%) and CONTINSURE (+0.83%) respectively, while the Industrial Goods index closed flat.

• Market breadth remained positive, with 25 gainers versus 13 losers. Total volume traded fell by 34.74% to 371.46 million, valued at N3.49 billion, and exchanged in 3,910 deals.

• We expect the market to close higher in tomorrow’s session as investors continue to find comfort in consumer goods and banking names.

CURRENCY

• At the time of writing, the naira — in the interbank market — declined against two of the currencies we track. The GBP/NGN (-0.05%) and EUR/NGN (-0.18%) weakened to N410.51 and N349.78 respectively, while the USD/NGN closed flat at N305.45. In the parallel market, the GBP/NGN (-0.40%) weakened to N497, while the USD/NGN and EUR/NGN remained flat at N385 and N420 respectively. Meanwhile, the USD/NGN (+0.15%) strengthened to N382.61 in the IEFX market.

FIXED INCOME AND MONEY MARKET

• The overnight rate expanded by 23.42% to 66.75%, as system liquidity declined further from a deficit of N59.07 billion to N103.37billion.

• Yields remained pressured in the T-bills market, driven by selloffs at the mid (+19 bps) and long (+15 bps) segment of the curve. The 9-NOV-17 (+161 bps) and 21-DEC-17 (+ 56 bps) bills recorded notable expansion in yield. Investors were bullish at the short (- 76 bps) end of the curve, with the 17-AUG-17 (-76 bps) recording the largest yield contraction. Overall, average yield expanded by 11 bps to 18.88%. The result of today’s primary auction was unavailable at the time of writing.

• Investors were bullish in the bond market, with average yield contracting by 3 bps to 16.86%. Demand at the short (-10 bps) end — driven by demand for the JUL 2017 bond (-60 bps) — overshadowed selloffs at the mid (+4 bps) and long (+2 bps) end of the curve. The JUL 2021 (+8 bps) and MAR 2024 (+11 bps) bonds experienced the largest yield expansion.