June 15, 2017/Cordros Research

Click here to download PDF Copy of Report

EQUITIES

• Nigerian equities fired on, with the All Share Index advancing 0.59% to close at 33,797.84 points.

• Today’s return further increased the Month-to-Date and Year-to-Date gains to 14.58% and 25.76%.

• Banking stocks, notably ZENITHBANK (+4.61%) and GUARANTY (+1.67%), continued to attract investor interest, with the sector’s index appreciating by 1.83%. Similarly, the Insurance (+1.36%) and Consumer Goods (+1.12%) indices closed higher, following gains recorded by MANSARD (+4.84%), AIICO (+3.70%), UNILEVER (+5.65%) and NB (+2.34%) respectively. On the other hand, the Industrial Goods (-1.11%) and Oil & Gas (-1.10%) indices depreciated, on the back of investors selling off WAPCO (-2.71%) and MOBIL (-4.16%) respectively.

• Market breadth remained positive with 33 gainers versus 24 losers, compared to 36 gainers against 22 losers yesterday. Total volume traded fell by 24.43% to 573.60 million shares, valued at N7.85 billion, and exchanged in 6,584 deals.

• We expect sentiment to remain positive in tomorrow’s session.

CURRENCY

• At the time of writing, the naira – in the interbank market – had appreciated against the three currencies we track – USD/NGN (+0.15% to N305.25), GBP/NGN (+0.93% to N409.42), and EUR/NGN (+1.75 to N357.71). In the parallel market, the LCY was flat against the USD, GBP, and EUR at N370.00 and N465.00, and N407 respectively.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate declined 11 percentage points to 6.75%, from 17.33%, supported by today’s N205.94 billion inflow from maturing OMO bills.

• Activities in the treasury bills space benefited from the improvement in system liquidity, with demand at all (short: -77 bps; mid: -17 bps; and long: -3 bps) ends of the curve causing average yield to drop 29 bps to 18.20% at yesterday’s NTB auction, the central bank fully allotted N39.01 billion, N23.02 billion, and N174.64 billion of the 91, 182, and 364-day bills at respective higher stop rates of 13.50% (previously 13.40%), 17.30% (previously 17.14%), and 18.69% (previously 18.65%).

• Demand also persisted in the bond market, with average yield – driven by demand at the short (-58 bps) end of the curve – falling by 20 bps to close at 16.52%. Trading was mixed across the intermediate and long segments, wherein yields recorded uptick of less than 1 bp apiece. Notably, the AUG 2017 (-287 bps to 15.33%) bond recorded the largest contraction.