October 17, 2017/Cordros Research

EQUITIES

• The domestic bourse bucked the three consecutive days of gains, with the ASI depreciating by 0.82% to 36,669.61 points, following profit taking across sectors.

• The Month-to-Date and Year-to-Date returns moderated to 3.47% and 36.45%, respectively.

• Performance across the sectors was negative, led by the Industrial Goods (-0.91%) index, followed by the Consumer Goods (-0.88%), Oil & Gas (-0.51%), Insurance (-0.36%), and Banking (-0.14%) indices, as investors took profit in the shares of DANGCEM (-1.78%), NESTLE (-3.26%), MOBIL (-4.91), MANSARD (-4.62%) and GUARANTY (-0.95%) respectively.

• However, market breadth was positive with 22 gainers and 21 losers, led by INTBREW (+5.78%) and REDSTAREX (-9.16%). Total volume traded decreased by 1.44% to 211.87 million units, valued at N4.74 billion and exchanged in 3,890 deals.

• Despite profit taking in today’s session, we believe the market remains fundamentally strong on the back of bullish outlook for the economy and Q3-17 corporate earnings.

CURRENCY

• The naira was flat against the USD at N364 in the parallel market, while it appreciated by 0.09% to N360.42 in the I&E FX window. Total volume traded in the I&E FX window stood at USD268.18 million.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate dropped by 5,250 bps to 26.67%, following the refund of excess debit for FX sales, which subdued the outflow from the system via sale of OMO bills worth N19.76 billion. 

• Activities in the NTB market remained bearish, as average yield expanded marginally by 3 bps to 17.27%. Yields rose at the short and long ends of the curve, as investors sold off the 23-DTM (+75 bps) and 233-DTM (+3 bps) bill, while snippets of demand ensued at the mid segment, driven by the 184-DTM (-48 bps) bill.

• Similarly, proceedings in the bond market remained bearish, as average yield expanded further by 4 bps to 14.84%. The expansion at the long segment – driven by sell off of the 18-APRIL-2037(+2 bps) bond – outweighed the mild demands at the short and mid segments owing to interest in the 29-JUN-2019 and 13-FEB-2020 bonds, respectively.

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