July 18, 2017/Cordros Research

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EQUITIES

• The equities market extended its bullish streak to the eighth session in a row, with the All Share Index appreciating by 0.41% to 33,436.61 points.

• Today’s gain increased the Month-to-Date and Year-to-Date returns to 0.96% and 24.42% respectively.

• The Consumer Goods (+1.43%) and Industrial Goods (+0.39) indices posted gains, owing to demand for the shares of UNILEVER (+4.98%) — as investors continued to react positively to the company’s impressive H1-2017 result — NESTLE (+1.77%), DANGCEM (+0.38%), and BERGER (+3.50), respectively. Meanwhile, the Insurance (-1.70%), Oil & Gas (-0.55%), and Banking (-0.32%) indices closed lower, as selloffs ensued in CUSTODYINS (-4.76%), CONTINSURE (4.55%), FO (-4.20%), OANDO (-0.29%), ZENITHBANK (-1.91%), and GUARANTY (-0.03%) respectively.

• Market breadth was positive with 24 gainers (vs. 22 gainers yesterday) and 18 losers (against 25 losers yesterday). Total volume traded increased by 644.59% to 2.40 billion shares, valued at 21.61 billion, and exchanged in 3,715 deals.

• We expect the ASI to appreciate further in tomorrow’s session, as investors continue to take positions ahead of Q2 earnings.

CURRENCY

• Yesterday, the apex bank injected USD195 million dollars — comprising USD100 million (via the wholesale window), USD50 million, and USD45 million (via the SMEs and Invisibles windows respectively) — into the FX market. It was business as usual in the currency space today, with the naira, in the interbank market, weakening against two of the currencies we track – USD (-2.97%) and EUR (-0.90%) to N315.00 and N364.10, respectively. The NGN/GBP appreciated by 0.23% to N409.83. In the parallel market, the NGN depreciated against the GBP by 0.64% to N473, while the  naira was flat against the USD and EUR at N367 and N420 respectively. Meanwhile, in the I&E FX window, the NGN/USD lost 0.38% to N363.57.

FIXED INCOME AND MONEY MARKET

• Despite the outflows via OMO auctions and debit for FX sales of USD195 million, the overnight rate contracted by 125 bps to 5.67%. Today, the apex bank sold N41.28 billion OMO bills  comprising N10.00 billion of the 198-day and N31.28 billion of the 345-day bills at respective stop rates of 17.94% and 18.55%, in a bid to cushion the effect of the N97.44 billion OMO bills maturing on Thursday.

• The NTB space was broadly bullish, as yields contracted across all ends of the curve – short (-8 bps), mid (-10 bps), and long (-5 bps) – resulting in average yield contracting by 7 bps to 18.22%. Notably, the 51 (-74 bps), 93 (-70 bps), and 198 (-35 bps) DTM bills were the toast of investors.

• Conversely, the bond market was dominated by the bears, as average yield expanded by 4 bps to 16.77%. Yields at the short (+8 bps) and mid (+6 bps) segments of the curve rose, owing to selloffs of the 27-JUL-2017 (+175 bps) and 12-JUL-2019 (+7 bps) bonds respectively. Meanwhile, snippets of demand ensued at the long end, causing yield to contract by less than 1 bp, owing to interest in the 22-JAN-2026 bond.