June 21, 2017/Cordros Research
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EQUITIES
- Nigerian equities bucked a 5-day gaining streak, with a market-wide profit-taking causing the All Share Index to reverse gains (1.67%) recorded thus far this week, after declining 2.61% (biggest loss since 27th June, 2016: -2.64%) to 33,477.89 points.
- Following today’s unimpressive performance, the Month-to-Date and Year-to-Date gains fell to 13.49% and 24.57% respectively.
- Industrial goods stocks were the most hit, followed by banking, insurance, consumer goods, and oil & gas names in that order. We highlight notable shares across the respective sectors: DANGCEM (-4.19%), WAPCO (-4.06%), ZENITHBANK (-3.399%), GUARANTY (-2.53%), AIICO (-4.69%), NEM (-4.17%), CADBURY (-4.98%), NESTLE (-1.10%), and OANDO (-4.97%). Specifically, the Industrial Goods, Banking, Insurance, Consumer Goods, and Oil & Gas indices declined by 3.56%, 2.90%, 1.41%, 1.14%, and 0.53% respectively.
- Market breadth remained negative, with 13 gainers versus 37 losers, compared to 25 gainers against 27 losers yesterday. Total volume traded increased further by 29.69%, to 508.73 million shares, valued at N6.40 billion, and exchanged in 5,876 deals.
- We expect the bulls to resurface in the coming session.
CURRENCY
- At the time of writing, the naira – in the interbank market – had depreciated by 0.02%, 0.25% and 0.09% against the USD, GBP, and EUR to N305.85, N398.33, and N350.46. In the parallel market, the LCY strengthened 0.43% against the GBP to N465.00, while it was flat against the USD and EUR at N368.00 and N410.00, respectively. Meanwhile, the NGN/USD (-1.16% to N365.86) weakened in the I&E FX window.
FIXED INCOME AND MONEY MARKET
- The overnight money market rate declined further, this time by 16 percentage points to 19.00%, from 34.50%. The contraction is attributable to anticipation of N152.61 billion inflow from maturing OMO bills tomorrow, which subdued the impact of today’s bond auction related withdrawal.
- The treasury bills market closed bearish, with average yield rising 4 bps to 18.28%. Investors sold off across all ends of the curve, with yield increasing 3 bps apiece at the short and mid segments, and 5 bps at the long end. The result of today’s NTB auction was unavailable at the time of writing.
- Selloff also persisted in the bond space, with yield being pressured at the short (+13 bps), mid (+4 bps), and long (+3 bps) ends of the curve. Average yield rose 6 bps to 16.73%. The result of today’s primary market auction was unavailable at the time of writing.
