November 15, 2017/Cordros Report
EQUITIES
- The equities market extended yesterday’s loss, with the ASI contracting further by 0.91% to 36,617.45 points, as investors took profit in most sectors, save for the Banking and Oil & Gas.
- Accordingly, the Month-to-Date return tuned negative (0.17%), while the Year-to-Date return moderated to 36.25%.
- The Industrial Goods (-1.49%) index led the losers, followed by the Insurance (-0.98%) and Consumer Goods (-0.86%) indices, as investors took profit in the shares of DANGCEM (-2.77%), MANSARD (-2.38%), and PZ (-8.93%) respectively. Conversely, bargain hunting ensued in the Banking (+1.03%) index as investors demanded for ZENITHBANK (+1.14%) shares. Meanwhile, the Oil & Gas index remained flat at 291.58 points.
- Market breadth remained negative with 25 losers and 15 gainers led by CILEASING (-8.97%) and AGLEVENT (+8.47%).Total volume traded decreased by 22.70% to 184.25 million units, valued at N3.32 billion, and exchanged in 3,590 deals.
- While acknowledging momentum profit taking, we think legroom for demand still exists on the back of strong market fundamentals.
CURRENCY
- The naira depreciated by 0.04% to N360.42 in the I&E FX window, while it remained flat at N363 in the parallel market. Total volume traded in the I&E FX window stood at USD89.99 million, exchanged within the range of N335.00 and N361.00.
FIXED INCOME AND MONEY MARKET
- The overnight money market rate contracted by 209 bps to 11.33% (vs.13.42% yesterday), following anticipation of maturing OMO bills tomorrow worth N141.73 billion.
- Activities in the treasury bills market turned bearish, expanding marginally by 1 bp to 16.49%. Yield at the short (+2 bps) and mid (+1 bp) ends of the curve drove expansion, as investors sold off the 14-DEC-2017(+64 bps) and 12-APR-2018 (+10 bps) bills. However, there was snippet of demand at the long (-1 bp) end of the curve, following demand for the 20-SEP-2018 (-35 bps) bill. At today’s primary auction, the apex bank allotted N107.9 billion of the 364 DTM and N6billion apiece of the 91DTM and 182 DTM bills. Notably, the 364 DTM bill was 2.2x oversubscribed, while the 91DTM and 182DTM bills were undersubscribed by N26.4 billion and N16.8 billion respectively. The stop rates were: 13.00% (vs. 13.10%) and 15.25% (vs.15.28%) for the 91 DTM and 182 DTM while the 364 DTM bill remained at 15.60%
- Sentiment remained bullish in the bond market, with average yield contracting by 4 bps to 14.95%. Yield contracted at the short (-26 bps) and long (-2 bps) ends of the curve, while snippet of selloff ensued at the mid (less than 1 bp) segment. Notable bonds are the 29-JUNE-2019 (-26 bps), 18-MAR-2037(-9bps), and 15-JUL-2021 (less than 1 bp) bond respectively.
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