October 30, 2017/Cordros Research

EQUITIES

• The equities market commenced the week positive, with the ASI appreciating 0.06% to 36,484.30 points, following bargain hunting in the Banking and Oil & Gas stocks.

• Accordingly, the Month-to-Date and Year- to-Date returns increased to 2.95% and 35.76% respectively.

• The Banking (+0.70%) index led the gainers, followed by the Oil & Gas (+0.06%) index, as investors demanded for the shares of UBA (+2.47%) and FO (+7.05%), respectively. On the flip side, the Industrial Goods (-1.49%), Insurance (-0.92%), and Consumer Goods (-0.03%) indices posted negative returns following profit taking in the shares of WAPCO (-3.85%), MANSARD (-3.47%), and DANGSUGAR (-1.97%) respectively.

• Market breadth was negative with 17 gainers and 21 losers, led by DANGFLOUR (+10.19%) and MORISON (-4.76%). Total volume traded decreased by 30.27% to 174.9 million units, valued at N1.82 billion and exchanged in 3,401 deals.

• Corporate Earnings: 9M-2017; UBN (PAT N11.5 billion vs. N13.1 billion), DIAMONDBNK (PAT N5.91 billion vs.3.51 billion), HONYFLOUR (PAT N2.2 billion vs. N389 million), UNITYBNK (PAT N2.44 billion vs.N3.42 billion), NESTLE 3M-2017 (PAT N6.4 billion vs.N51.1 million loss), LIVESTOCK(PAT N140 million loss vs.N261 million loss).

• We believe bargain hunting will persist, amidst strong market fundamentals and improving macroeconomic conditions.

CURRENCY

• The naira depreciated by 0.08% to N360.61 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 USD108.34 million, exchanged within the range of N340.00 and N362.00.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate expanded by 125bps to 20.00%, following outflow via OMO sales worth N8.75 billion.

• Proceedings turned bullish in the NTB market, despite the moderation in system liquidity, as average yield contracted by 17bps to 18.01%. Yields contracted at the short and long ends of the curve, owing to interest in the 52DTM (-150 bps) and 283DTM (-62 bps) bills, respectively. Conversely, selloff of the 129DTM bill, drove yield expansion at the mid segment.

• Similarly, activities turned bullish in the bond market, as average yield contracted marginally by less than 1 bp. Demand for the 29-JUN-2019 (less than 1 bp) and 27-JAN-2022 (-3 bps) bonds drove yield contractions in the short and long ends of the curve, while selloffs of the 15-JUL-2021 (less than 1bp) bond drove yield expansion at the mid segment.

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