August 8, 2017/Cordros Research
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EQUITIES
- The equities market closed positive for the sixth consecutive trading session with the ASI appreciating by 1.26% to 37,999.56 points, following gains recorded by consumer goods shares.
- Accordingly, the Month-to-Date and Year-to-Date returns increased to 6.01% and 41.40% respectively.
- The Consumer Goods (+5.36%) index recorded gains, following rallies in NESTLE (+8.96%), NB (+5.00%), GUINNESS (+10.25%), DANGFLOUR (+10.17%), UNILEVER (+2.99%) and 7UP (+3.48%) stocks. Meanwhile, the Oil & Gas (-0.85%), Insurance (-0.59%), Industrial Goods (-0.16%), and Banking (-0.09%) indices shed weight, following selloffs of TOTAL (-0.57%), MANSARD (-2.42%), DANGCEM (-0.33%), and ZENITHBANK (-2.39%) shares, respectively.
- Market breadth was positive with 31 gainers and 20 losers. However, total volume traded declined by 14.25% to 218.22 million shares, valued at N5.07 billion, and exchanged in 5,336 deals.
- We expect the bullish momentum to be sustained in the coming session.
CURRENCY
- Yesterday, the apex bank, in its continued efforts to ensure FX stability, sold USD195 million – comprising USD100M in the wholesale window, USD50M in the SMEs window, and USD45M in the invisibles segment. At the time of writing, the CBN’s referenced USD/NGN (+0.02%) strengthened to N305.50. The Bloomberg’s referenced USD/NGN (+0.82%) NAFEX rate appreciated to N364.99 while the GBP/NGN (-0.48%) and EUR/NGN (-0.20%) depreciated to N475.78 and N430.59 respectively. The parallel market also recorded mixed reactions with the GBP/NGN (-0.21%) weakening to N477 and the USD/NGN and EUR/NGN, respectively, closing flat at N366 and 428. The FMDQ’s referenced USD/NGN (-0.21%) in the I&E FX window closed lower at N368.17.
FIXED INCOME AND MONEY MARKET
- The overnight money market rate contracted by 117 bps to 26.33%, from yesterday’s 27.50%, following the anticipation of maturing OMO bills on Thursday, valued at N113.05 billion.
- The treasury bills market closed on a bearish note, with average yield expanding by 11 bps to 17.59%. Yields at the short (+22 bps), mid (+14 bps), and long (1 bp) ends of the curve expanded as investors sold off the 2-NOV-2017 (+77 bps), 18-JANUARY-2018 (+73 bps) and 24-MAY-2018 (+11 bps) bills respectively.
- Similarly, proceedings in the bond market were broadly bearish, with average yield expanding by 8 bps to 16.46%. Yields at the short (+7 bps), mid (+10 bps) and long (+7 bps) ends expanded, as investors relinquished interests in the 29-JUNE-2019 (+7 bps), 15-JULY-2021 (+23 bps), and 18-JULY-2034(+28 bps) bonds.