July 10, 2017/Cordros Research
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EQUITIES
- The domestic bourse started the week on a positive note, extending gains to the third consecutive session. The All Share Index appreciated by 0.48% to close at 32,614.60.
- Following today’s performance, the Month-to-Date loss moderated to 1.52% while the Year-to-Date return improved to 21.36%.
- The Banking (1.97%) index recorded the highest gain, as bargain hunting ensued in UBA (4.94%), ACCESS (4.93%), ZENITHBANK (3.45%), and ETI (3.87%). Similarly, the Oil and Gas (0.21%) index depreciated, following demand for the shares of OANDO (4.82%), while the Industrial Goods index closed flat. On the other hand, the Consumer Goods (-0.08%) and Insurance (-0.24%) indices closed negative, as investors sold off CADBURY (-4.08%) and MANSARD (-4.78%) respectively.
- Market breadth remained positive with 26 gainers and 15 losers. Total volume traded decreased by 14.27% to 182 million shares, valued at N2.02 billion, and exchanged in 3,710 deals.
- We expect gains to persist in the coming session, as investors take position ahead of Q2 earnings.
CURRENCY
- At the time of writing, the naira — in the interbank market — had depreciated by 0.18% and 0.08% against the GBP and EUR to N405.01 and N358.54, respectively, and remained flat against the USD at N306. In the parallel market, the LCY strengthened 0.81% and 1.43% against the USD and EUR to N367 and N414 respectively, while the NGN/GBP remained flat at N470. Meanwhile, in the I&E FX window, the NGN/USD depreciated by 0.87% to N361.86.
FIXED INCOME
- System liquidity shrank further today, following the debit for FX sales of USD254.3 million late Friday, in addition to N16.12 billion outflow via OMO bills sales today. Accordingly, the overnight rate increased further to 28.17%, from last week’s close of 15.25%. In today’s OMO auction, the apex bank sold N3.3 million and N16.12 billion worth of the 199-day and 360-day bills respectively.
- The NTB space was bearish, with average yield expanding by 10 bps to 18.27%. The short (+29 bps) and long (+2 bps) ends of the curve were most pressured, owing to selloffs of the 20-JUL-2017 (+171 bps) and 03-MAY-2018 (+12 bps) bonds while yield expanded by less than 1 bp at the mid segment, driven by the 02-NOV-2017 (+5 bps) bill.
- Investors in the bond space were also downbeat, with average yield expanding by 4 bps to 16.86%. Selloffs of the 31-AUG-2017 (+15 bps) and 22-JAN-2026 (+12 bps) bonds caused yield expansion at the short (+5 bps) and long (+5 bps) segments of the curve. Conversely, bonds at the mid (-1 bps) segment attracted modest interest.
