June 19, 2017/Cordros Research

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EQUITIES

• The bulls dominated the domestic bourse, with demand for industrial goods, consumer goods, and banking stocks moving the All Share Index 0.96% higher to 34,135.10 points.

• Today’s return increased the Month-to-Date and Year-to-Date gains to 15.72% and 27.02% respectively.

• The Industrial Goods (+1.34%), Consumer Goods (+0.65%), and Banking (+0.51%) indices recorded gains, following price appreciations in DANGCEM (+2.44%), WAPCO (+0.93%), FLOURMILL (+3.51%), NB (+0.61%), UBA (+0.81%), and GUARANTY (+0.76%) respectively. On the other hand, the Oil & Gas (-1.86%) and Insurance (-0.36%) indices closed in the red, as investors sold off MOBIL (-5.00%) and LINKASSURE (-3.51%).

• Market breadth was positive with 28 gainers versus 19 losers. Total volume traded decreased marginally by 2.18%, to 482.52 million shares, valued at N5.68 billion, and exchanged in 5,771 deals.

• We expect selloffs to ensue in tomorrow’s session.

CURRENCY

• It was disclosed that the central bank planned to hold two FCY auctions today to sell USD100 million (both spot and 60-day forward) and an unspecified amount to clear the backlog of demand of airlines, fuel importers and manufacturing firms. Aside that, it was business as usual in the currency space, with the naira – in the interbank market – strengthening against the GBP (+1.35% to N409.08) and EUR (+1.42% to N358.23) while it depreciated against the USD (-0.02 to N305.80). In the parallel market, the USD/NGN (+0.54% to N368.00) appreciated while the GBP/NGN and EUR/NGN traded flat at N465.00 and N410.00 respectively.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate jumped 38 percentage points to 53.33%, from last week’s close of 15.67%, supported by the apex bank mopping up a total sum of N21.48 billion via today’s OMO auction, wherein it sold N4.61 billion (vs. N5.00 offered) and N16.85 billion (vs. N10.00 billion) of the 185 and 346-day bills respectively.

• The treasury bills market closed bearish, with average yield – following selloffs at the short (+58 bps) end of the curve – rising 16 bps to 18.32%. Suffice to say that trading was quiet, as c.70% of bills traded flat. Meanwhile, snippets of demand occurred at the mid (less than 1 bp) and long (-1 bp) segments of the curve.

• Investors were similarly downbeat in the bond market, with average yield increasing by 7 bps to 16.50%. Selloffs occurred across all ends of the curve: short: +24 bps; mid: +11 bps; and long: +1 bp. Notably, the JUL 2017 bond recorded the largest expansion, with yield rising by 94 bps to 17.65%.