July 12, 2017/Cordros Research

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EQUITIES

• The domestic bourse fired on for the fifth consecutive session, as investors remained upbeat in large cap counters, causing the All Share Index to appreciate by 0.46% to 32,981.63 points.

• Today’s proceedings improved the Year-to-Date return to 22.72% while moderating the Month-to-Date loss to 0.41%.

• Gains accrued across all sectors, with the Banking (1.34%) index taking the lead — stemming from demand for GUARANTY (+1.94%) and ACCESS (+1.53%). The Consumer Goods (+0.46%), Insurance (+0.29%), Industrial Goods (+0.18%), and Oil & Gas (+0.04%) indices also remained positive, driven by investor interest in DANGFLOUR (+2.25%), NESTLE (+0.14%), NEM (+4.85%), DANGCEM (+0.02%), SEPLAT (+1.08%), and FO (+2.67).

• Market breadth was positive with 28 gainers and 14 losers. Total volume traded decreased by 16.77% to N182 million shares, valued at N2.03 billion, and exchanged in 3,940 deals.

• Corporate Release: 2016FY; GUINEAINS (PAT: N2.5 million Vs -N7.2 million).

• In line with our prognosis for the week, we expect the market to gain more points in the coming session.

CURRENCY

•  At the time of writing, the LCY – in the interbank market – had appreciated against the USD, GBP and EUR by 0.02%, 0.01% and 0.42% to N305.95, N404.9, and 359.13, respectively. However, in the parallel market, the naira was flat against two of  the currencies we track – USD (N368), GBP (N470) and  depreciated by 0.48% against the EUR to N420. Meanwhile, in the I&E FX window, the NGN/USD depreciated by 0.80% to N366.25.

FIXED INCOME

• The overnight rate dipped further by 100 bps to 15.17%. The contraction was due to the expected inflow of maturing OMO bills tomorrow – valued at N89.96 billion –  which subdued the impact of outflow via OMO auctions today,  wherein the apex bank sold N34.32 billion (vs. N40.00 billion offered) of the 344-day bill, while no sale was recorded on the N5.00 billion offered of the 197-day bill. 

• The bulls continued to dominate the NTB space, as average yield contracted by 17 bps to 18.11%. The yield at the short (-63 bps) end contracted further, amid investor interest in the 20-JUL-2017 (+602 bps) bill. However,  yields at the mid (+1 bps) and long (+3 bps) ends expanded, driven by snippets of selloffs, particularly of  the 02-NOV-2017 (+20 bps) and 18-JAN-2018 (+47 bps) bills respectively.

• The bond market was relatively quiet,, as average yield contracted by less than 1 bp. Yield at the long (-1 bp) end declined, owing to demand for the 17-MAR-2027 (-5 bps) bond. Meanwhile,  yields at the short and mid ends of the curve expanded marginally by less than 1 bp apiece, following sell-offs of the 31-AUG-2017 (+9 bps) and 29-JUN-2019 (+2 bps) bonds. The result of today’s auction was not available at the time of writing.