October 16, 2017/Cordros Report

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EQUITIES

• The equities market sustained its uptrend, with the ASI appreciating by 0.33% to 36,971.27 points, following bargain hunting in value stocks

• Accordingly, the Month-to-Date and Year-to Date returns improved to 4.32% and 37.57%, respectively.

• The Banking (+0.99%) index recorded the largest gain, followed by the Insurance (+0.23%) and Industrial goods (+0.11%) indices, as investors demanded for the shares of ZENITHBANK (+3.14%), MANSARD (+3.59%), and DANGCEM (+0.21%) respectively. Conversely, the Consumer Goods (-0.31%) and Oil & Gas (-0.02%) indices recorded negative returns, following profit taking in NB (-1.21%) and OANDO (+0.17%) shares, respectively.

• Market breadth remained positive, with 24 gainers and 15 losers, led by CILEASING (+9.55%) and LEARNAFRCA (-5.00%). Total volume traded increased by 34.68% to 215 million units, valued at N2.73 billion. Notable crossings include 13 million units of GUARANTY at N42.13 and 3.5 million units of PRESCO at N67.50.

• Corporate Release: UBA 9M-2017 earnings; (PAT: N60.92 billion vs. N 49.51billion).

• We believe the market remains fundamentally strong – amid broadly bullish outlook for the economy and Q3-17 corporate earnings.

CURRENCY

• The naira depreciated against the USD in the parallel market and I&E FX window by 0.28% and 0.09% to N364 and N360.75, respectively. Total volume traded in the I&E FX window as at Friday was USD167.713 million (today’s data was unavailable at the time of writing). Meanwhile, on Friday, the apex bank injected USD306.30 million into the FX market.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate expanded by 4,384 bps to 79.17%, following outflows via sale of OMO bills worth N65.80 billion and debit for FX sales worth USD306 million.

• Proceedings in the NTB space remained bearish, as average yield expanded by 12 bps to 17.24%, reflecting tight liquidity position. Selloffs ensued across all ends of the curve, as investors sold the 17-DTM (+244 bps), 143-DTM (+50 bps), and 234-DTM (+91 bps) bills.

• Activities in the bond market turned bearish – halting the five consecutive days of gain — with average yield expanding marginally by 1 bp to 14.80%. Profit taking at the long (+2 bps) end of the curve, outweighed snippets of demand at the short (-1 bp) and mid (less than 1 bp) ends. The notable bonds include the 22-JAN-2026 (+5 bps), 29-JUN-2019 (-1 bp), and 13-FEB-2020 bonds, respectively. 

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