October 23, 2017/Cordros Research
EQUITIES
- The equities market commenced on a negative note, with the ASI shedding 0.48% to 36,411.73 points, following profit taking across most sectors save for Oil & Gas.
- Accordingly, the Month-to-Date and Year-to-Date returns moderated to 2.74% and 35.49% respectively.
- The Industrial goods index (-4.00%) led the losers, followed by the Insurance (-1.21%), Banking (-0.51%), and the Consumer Goods (-0.19%) indices, as investors sold off the shares of WAPCO (-9.75%) — which reported a loss after tax of N18.79 billion in its recently released Q3 result – while taking profit in MANSARD (-4.89), ZENITHBANK (-3.42%), and NB (-1.88%) shares. Meanwhile, the Oil & Gas indices closed flat.
- Market breadth remained negative with 15 gainers and 29 losers led by INTBREW (+10.23%) and WAPCO (-9.75%). Total volume traded increased by 137.96% to 253.54 million units, valued at N2.7 billion and exchanged in 3,609 deals. Notable crosses are 1.2 million units of DANGCEM at N210, 59 million units of ACCESS at N9.50, and 6 million units of UBA at N9.00.
- Corporate Release: 9M’2017 earnings; FIDELITY (PAT: N14.45 billion vs.N8.75 billion), SEPLAT (PAT: N1.62 billion deficit vs.N24.08 billion deficit) and RTBRISCOE (PAT N1.72 billion deficit vs.N1.68 billion deficit).
- While market performance will likely reflect reported earnings deviation from investors’ expectation, market fundamentals (amid improving macroeconomic conditions) remain strong.
CURRENCY
- The naira appreciated by 0.05% to N360.13 in the I&E FX window while it remained flat at N363 in the parallel market. Meanwhile, total volume traded in the I&E FX window stood at USD156.43 million, exchanged within the range of N340.00 and N362.50.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate expanded further by 3,000 bps to 148.33%, following outflow worth N17.99 billion via OMO auction.
- Activities were broadly bearish in the treasury bills market, as the average yield expanded by 47 bps, following further squeeze in system liquidity. Yields expanded across all ends of the curve – short, mid and long – owing to selloffs in the 31DTM (+517 bps), 178DTM (+87 bps), and 346DTM (+65 bps) bills respectively.
- Similarly, proceedings turned bearish in the bond market, as average yield expanded by 11 bps to 14.91%. Yields expanded at the mid and long segments, owing to selloffs of the 15-JUL-2021 (+37 bps) and 17-MAR-2027 (+27 bps) bonds, while it contracted at the short segment, driven by interest in the 29-JUN-2019 (less than 1bp) bond.
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