June 5, 2017/Cordros Research
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EQUITIES
- The bulls continue to dominate the domestic bourse, with the All Share Index adding 3.85% to record a new 52-week high, closing at 32, 578.38 points.
- Today’s strong performance pushed the Month-to-Date and Year-to-Date gains to 10.44% and 21.22% respectively.
- The Industrial Goods (+6.49%) index recorded the largest gain, following demand for DANGCEM (+8.85%), WAPCO (+4.29%), and BETAGLAS (+5.00%). Likewise, the Banking (+1.75%) and Insurance (+1.14%) indices closed higher, owing to demand for ZENITHBANK (+0.95%), GUARANTY (+0.32%). CUSTODYINS (+9.72%), and MANSARD (+4.64%), respectively. The Consumer Goods (+0.22%) and Oil & Gas (+3.28%) indices also advanced, as investors bought the shares of NESTLE (+3.94%), CADBURY (+4.96%), MOBIL (+10.25%), and TOTAL (+1.89%), respectively.
- Market breadth remains positive, with 44 gainers and 13 losers. Total volume traded declined by 9.59% to 640. 44 million shares, valued at N7.66 billion, and exchanged in 7,024 deals.
- We expect gains to extend into tomorrow’s session.
CURRENCY
- In its avowed determination to hasten rate convergence, the apex bank has promised to sustain its dollar injection in the market this week. That said, the naira — in the interbank market — weakened against two of the currencies we track. The GBP/NGN (+0.64%) and EUR/NGN (+1.20%) strengthened to N415.04 and N361.28, respectively, while, the USD/NGN (-0.02%) weakened to N305.55. In the parallel market, the USD/NGN (+0.80%), GBP/NGN (+1.03%), and EUR/NGN (+2.64%) strengthened to N372, N480, and N410, respectively. Meanwhile the USD/NGN (+0.17%) strengthened to N377.91 in the IEFX market.
FIXED INCOME AND MONEY MARKET
- The overnight rate expanded by 59 bps to 9.67% as the apex bank mopped up N10.29 billion from the system, through OMO bill (N0.30 billion of the 192-DTM bill and N9.99 billion of the 346-DTM bill) sales to investors.
- Proceedings in the secondary market were mixed, albeit a modest bullish bias. Average yield contracted by 1 bp to 18.47%, following demand at the short (-8 bps) and mid (-2 bps) ends of the curve, in particular the 6-JUL-17 (-86 bps) and 12-OCT-17 (-42 bps) bills, respectively. Meanwhile, yield at the long (+4 bps) end of the curve were pressured, as investors sold-off the 10-MAY-18 (+41 bps) maturity.
- The bond market closed on a bearish note, with yields on 86% of traded bills coming under pressure. Yields expanded across all (short:+30 bps, mid: +6 bps, and long: +1 bp) ) segments of the curve, with the JUL 2017 (+121 bps), JUL 2021 (+1 bp), and MAR 2024 (+4 bps) maturities experiencing notable yield expansion respectively. Overall, average yield expanded by 11 bps to 16.77%.
