March 15, 2018/Cordros Update
EQUITES
- The bears continued to dominate the equities market, with the ASI shedding 1.53% to 42,185.38 points, as investors extended profit taking in banking stocks, in a marked deviation from expected positive reaction to Q4-17 corporate releases so far.
- Accordingly, the Year-to-Date gain dipped further to 10.31% while the Month-to-Date loss increased to 2.64%.
- The Banking (-3.12%) index remained the highest loser, following profit taking in GUARANTY (-3.49%), ZENITHBANK (-3.85%), UBA (-2.10%), and ACCESS (-4.45%) shares. The Oil & Gas (-1.91%), Industrial Goods (-1.26%), and Insurance (-0.79%) indices also recorded negative returns, as investors took profit in SEPLAT (-223%), DANGCEM (-2.31%), and MANSARD (-1.09%) stocks, respectively. On the flip side, the Consumer Goods index (+0.20%) turned positive, owing to gains in the shares of NB (+1.60%) and NESTLE (+1.09%).
- Market breadth remained negative with 39 losers and 15 gainers, led by FIDELITYBK (-9.25%) and NPFMCRFBK (+9.78%). Total volume of trades increased by 8.34% to 404.66 million, valued at NGN6.03 billion, and exchanged in 5,403 deals.
- Despite losses in today’s session, we reiterate our positive outlook for equities, on the back of still-positive macroeconomic fundamentals.
CURRENCY
- The naira strengthened against the dollar by 0.05% to NGN360.06 in the I&E FX window, while it weakened by 0.28% to NGN363 in the parallel market. Total turnover in the I&E FX window declined further by 60.33% to USD128.06 million, consummated within the NGN359 and NGN361.50/USD band.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate expanded 125 bps to 7.5%, as the CBN mopped up excess liquidity via OMO auction. The bank sold a total of NGN446.46 billion — N2.70 billion of the 105DTM (at 12.60%) and N443.76billion of the 259DTM (at 14.40%) — worth of bills. Inflows today include NGN261.86 billion and NGN191.44 billion in matured OMO and treasury bills, respectively.
- Sentiments turned bearish in the NTB secondary market, following the announcement of the OMO auction. Consequently, average yield rose by 2 bps to 14.81%. Selloffs of the 28DTM (+75 bps), 140DTM (+18 bps), and 259DTM (+50 bps) bills led to yield expansion at the short (+5 bps), mid (+1 bps), and long (+5 bps) ends of the curve, respectively.
- In the bond market, there was also a reversal in the bullish trend, as average yield inched upwards by 7 bps to 13.48%. Yields expanded at the short (+8 bps), mid (+1 bp), and long (-12 bps) ends of the curve, owing to selloffs of the JAN-2022 (+22 bps), MAR-2027 (+7 bps) and JUL-2034 (+20 bps) bonds, respectively.