July 24, 2017/Cordros Research
Click here to download full PDF copy of report
EQUITIES
- The Nigerian stock market recorded its 13th consecutive gain, with continued bargain hunting (most notable in industrial goods shares) advancing the ASI by 1.86% to close at 34,652.52 points.
- Today’s bullish performance increased the Month-to-Date and Year-to-Date gains to 4.63% and 28.94% respectively.
- The Industrial Goods (+2.51%) index led sectoral gains, driven by investor interest in DANGCEM (+5.00%) – amid positive expectation for the cement giant’s soon-to-be-released H1 earnings — and WAPCO (+0.33%), as its Q2 performance continued to spur demand. The Banking (+1.11%) and Oil & Gas (+0.12%) indices followed suit, following price appreciations in GUARANTY (+0.03%) and OANDO (+1.49%) stocks. On the flip side, selloffs ensued in the Consumer Goods (-0.47%) and Insurance (-0.42%) sectors, as investors relinquished holdings in NESTLE (-1.74%) and MANSARD (-1.48%) shares respectively.
- Market breadth was flat with 20 gainers and losers apiece. Meanwhile, total volume traded decreased by 22.33% to 293.75 million shares, valued at N3.95 billion, and exchanged in 3,712 deals.
- Corporate Releases: H1-2017; TRANSCORP (PAT: 4.16 billion vs. -12.19 billion); NAHCO (PAT: 176.32 million vs. 90.59 million); and TRANSEXPR (PAT: 3.69 million vs. -29.04 million).
- We expect the ongoing rally to persist in the coming session, as investors continue to take position ahead of corporate releases, with better-than-2016 declarations further stoking appetite.
CURRENCY
- The naira had, at the time of writing, depreciated against two of the currencies we track in the interbank segment – GBP (-0.28%) and EUR (-1.40%) – while it strengthened against the USD (+0.02%), closing at N410.91, N372.88N and N305.75 respectively. In the parallel market, however, the NGN/GBP (-0.28%) weakened to N475 while the NGN/USD and NGN/EUR closed flat at N367 and N420 respectively. In the I&E FX window, the naira weakened by 0.08% to N366.67.
FIXED INCOME AND MONEY MARKET
- The overnight money market rate expanded by 391 bps to 18.83%, despite a reported 68.3% increase in system liquidity, from N54.21 billion last week to N91.24 billion today. The rate expansion can be attributed to the lingering impact of N86.24 billion withdrawal via OMO sales last Friday.
- The bulls dominated the treasury bills market, with average yield contracting by 4 bps to 17.80%. Demand occurred across the short and mid ends of the curve, with yields contracting by 8 bps and 6 bps respectively. Meanwhile, there were snippets of sell-off at the long end of the curve, wherein yield expanded by 1 bps.
- On the other hand, the bond market closed on a bearish note, as average yield expanded by 13 bps to 16.75%. Yields at the short (+46 bps), mid (+1 bps) and long (+1 bps) segments of the curve increased, owing to selloffs of the 27-JUL-2017 (+200 bps), 12-JUL-2019 (+3 bps) and 15-JUL-2021 (+10bps) bonds respectively.
