November 16, 2017/Cordros Report

EQUITIES

• The equities market halted two consecutive days of profit taking, with the ASI appreciating by 0.05% to 36,634.89 points, following bargain hunting in the Banking Sector.

• The Month-to-Date loss reduced to 0.12% while the Year-to-Date returns improved to 36.32%.

• The Banking (+0.64%) index posted positive returns, following demand for the shares of GUARANTY (+1.41%).On the flip side, the Insurance (-0.79%), Oil &Gas (-0.17%), and Consumer Goods (-0.08%) indices closed negative, as investors sold off CONTINSURE (-3.62%) and took profit in SEPLAT (-1.01%) and GUINNESS (-0.99%) shares. Meanwhile, the Industrial Goods index closed flat at 2056.42 points.

• Market breadth remained negative with 25 losers and 17 gainers, led by CAVERTON (-8.97%) and BOCGAS (+9.88%) respectively. Total volume traded increased by 18.18% to 217.75 million units, valued at N11.71 billion, and exchanged in 3,088 deals.

• We think bargain hunting will persist, on the back of strong market fundamentals.

CURRENCY

• The naira appreciated by 0.24% to N359.56 in the I&E FX window, while it depreciated by 0.28% to N364 in the parallel market. Total volume traded in the I&E FX window stood at USD299.80 million, exchanged within the range of N340.00 and N361.50.

FIXED INCOME AND MONEY MARKET

• The overnight money market rate contracted by 466 bps to 6.67% following inflow via matured OMO bills today worth N141.73 billion. In a bid to reduce its impact on liquidity, the apex bank sold OMO bills worth N130.39 billion, comprising N122.32 billion and N8.01 billion of the 210DTM and 91DTM bills respectively.

• Sentiments remained bearish in the NTB market, with average yield expanding by 5 bps to 16.54%.Yield at the short (+15 bps) and long (+6 bps) segments of the curve expanded, while yield at the mid (-8 bps) end of the curve contracted. Notable bills are the 21-DEC-2017 (+84 bps), 18-OCT-2018 (+189 bps), and 1-MAR-2018 (-83 bps) respectively.

• Proceedings remained bullish in the bond market, with average yield contracting by 3 bps to 14.91%.Yields contracted at the long (-5 bps) and short (less than 1 bp) ends of the curve, with investor interest in the 14-MAR-2024 (-26 bps) and 29-JUNE-2019 bond. However, there was snippet of selloff at the mid (less than 1 bp) segment of the curve as sell off ensued in the 15-JUL-2021 bond. 

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