July 25, 2017/Cordros Research
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EQUITIES
- The bulls continued to dominate the equity market for the 14th consecutive session, as investors remain bullish on value stocks ahead of earnings releases. The NSE ASI advanced by 1.19% at 35,065.47 points to hit a new 2017 high.
- Today’s bullish performance increased the Month-to-Date and Year-to-Date returns to 7.29% and 32.22%,respectively.
- The bourse, in today’s trading session, recorded gains across all sectoral indices – Banking (+2.62%), Consumer Goods (+0.12%), Industrial Goods (+2.94%), Insurance (+0.59%) and Oil & Gas (+1.77%). The gains were driven by investor interest in GUARANTY (+0.53%), NESTLE (+0.89%), DANGCEM (+4.90%), MANSARD (+5.00%) and SEPLAT (+0.04%), respectively.
- Market breadth was positive with 27 gainers and 18 losers. Total volume of stocks traded on the exchange decreased by 1.76% to 288.58 million shares valued at N2.46 billion and exchanged in 2,578 deals.
- Corporate Releases: Q1-2017; TRIPPLEG (PAT: 2.72 million vs. -1.65 million); H1-2017; BOCGAS (PAT: 136.44 million vs. 12.84 million); CAVERTON (PAT: 594.58 million vs. -2.43 million); AIICO (PAT: 988.29 million vs. 1.39 billion); FIDSON (PAT: 466.07 million vs. 39.58 million)
- We expect the bullish trend to persist in tomorrow’s session as investors continue to take position ahead of corporate releases.
CURRENCY
- In its continued stride to sustain FX stability, the apex bank sold USD195 million in the inter-bank segment – USD100 million via the wholesale window, USD50 million via the SMEs window and USD45 million at the invisibles segment. Meanwhile, the naira showed mixed reactions in the interbank segment, as at the time of writing; it strengthened against the EUR (+1.40%), weakened against the GBP (-0.11%) and was flat against the USD closing at N367.66, N411.35 and N305.75, respectively. In the parallel market, NGN/GBP and NGN/EUR closed flat while the NGN/USD (+0.54%) strengthened, closing at N475, N420 and N365 respectively. In the I&E FX window, the NGN/USD (-0.08%) weakened to N366.67.
FIXED INCOME
- The overnight money market rate further expanded by 0.34 bps to 19.17%, following the liquidity outflow via OMO auctions of N45.33 billion and the debit for FX sales worth USD195 million by the apex bank today.
- The treasury bills market was upbeat with average yields contracting by 19 bps to 17.62%, stemming from demands across all ends of the curve – short (-46 bps), mid (-7 bps) and long (-6 bps). Notable bills include 17-AUG-2017, 26-OCT-2017, and 25-JAN-2018 respectively.
- The bulls persisted in the bonds space with average yield contracting by 9 bps to 16.63%. Rates contracted on the short (9 bps), owing to demand for 31-AUG-2017 bond, while bits of sell-offs occurred on the mid (1 bps) and long (2 bps) ends of the curve due to 29-JUN-2019 and 18-MAR-2036 bonds.
