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Nigerian Stocks Decline -1.51% to Record Biggest in Current Month, Driven by Profit-Taking

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L – R: Shows Bola Adeeko, Head, Shared Services Division, NSE presenting a replica of the closing gong to Andrew Ejayeriese, President, Nigerian Association of Petroleum Explorationists (NAPE) during the Closing Gong Ceremony at the Exchange on Wednesday.

March 7, 2018/Cordros Capital

EQUITIES

  • Investors were downbeat in today’s trading session, as the ASI declined by 1.51% (the biggest loss in the month so far) to 42,952.70 points, owing to investors booking profit on previous gains in major stocks.
  • Consequently, the Month-to-Date return turned to a loss of 0.87%, while the Year-to-Date gain moderated to 12.31%.
  • Extended profit-taking in DANGCEM (-3.60%), GUARANTY (-1.86%), NESTLE (-0.36%), and TOTAL (-3.92%) shares led to negative returns in the Industrial Goods (-3.60%), Banking (-0.90%), Consumer Goods (-0.74%), and Oil & Gas (-0.50%) indices. On the flip side, the Insurance (+0.35%) index posted a gain, following demand for the shares of HMARKINS (+6.06%).
  • Market breadth turned positive, with 26 gainers and 23 losers, led by ETERNA (+10.15%) and UNITYBNK (-9.24%) shares. Total volume of trades declined by 39.32% to 270.33 million, valued at NGN5.18 billion, and exchanged in 4,799 deals.
  • Despite loss in today’s session, we believe legroom for gains still exist; more so, as investors position ahead of Q4-2017 corporate earnings releases.  

CURRENCY

  • The USD/NGN rate weakened by 0.08% to NGN360.17 in the I&E FX window, while it remained flat at NGN362 in the parallel market. Total turnover in the I&E FX window improved by 48.11% to USD199.36 million, traded within the range of NGN330 to NGN364.50 band. Meanwhile, the apex bank injected USD210 million into the FX market yesterday, comprising USD100 million, USD55 million, and USD55 million disbursements to the wholesale, SMEs, and invisibles windows, respectively.

FIXED INCOME AND MONEY MARKET

  • The overnight lending rate dropped by 92 bps to 12.50%, following (1) an increase in market liquidity levels (+6% to NGN166.60 billion), and (2) anticipation of tomorrow’s inflow via maturing OMO bills worth NGN152.93 billion.
  • Proceedings remained bullish in the NTB market, thanks to relative improvement in system liquidity. Average yield contracted by 4 bps to 14.99%, with yields closing lower at the short (+3 bps) and mid (-9 bps) ends of the curve, but flat at the long segment. Notable bills include the 85DTM (-32 bps) and 92DTM (-37 bps).
  • Conversely, investors were downbeat in the bond market, with average yield expanding by 3 bps to 13.70%. Yields expanded at the short (+3 bps) and mid (+6 bps) ends of the curve but closed flat at the long segment. Notable bonds include the JAN-2022 (+16 bps) and JUL-2030 (+7 bps) respectively.

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