March 19, 2018/Cordros Report
EQUITIES
- The bears dominated the equities market for the fourth consecutive session, with the ASI dipping 0.21% to 41,845.92 points.
- Accordingly, the Month-to-Date loss increased to 3.43%, while the Year-to-Date gain dropped to 9.42%.
- The Insurance (-1.72%) and Consumer Goods (-1.14%) indices recorded losses, as investors took profit in the shares of MANSARD (-1.10%) and NB (-3.38%) respectively. It is worth stating that CADBURY (-9.65%) recorded the largest loss, despite positive FY-17 corporate earnings released today, which showed growth in revenue by 10% and a return to post-tax profit of NGN300million, from a loss of NGN296 million in the previous year. On the flip side, the Banking index halted six consecutive days of loss, inching higher by 0.28%, following renewed interests in GUARANTY (+0.89%) and ZENITHBANK (+1.45%) stocks. Meanwhile, demand for DANGCEM (+0.38%) shares led to again in the Industrial Goods (+0.19%) index, while the Oil & Gas index closed flat.
- Market breadth remained negative for the sixth straight session, with 35 losers and 14 gainers, led by CADBURY (-9.65%) and CILEASING (+9.94%). Total volume of trades declined by 23.19% to 327.76 million units, valued at NGN5.26 billion, and exchanged in 5,366 deals.
- In our view, it is likely investors take advantage of soft prices to hunt bargains in the equities market, leading to a positive outlook in the short term. Also, strengthening macroeconomic fundamentals remain supportive of gains in the medium to long term.
CURRENCY
- The USD/NGN strengthened in the parallel market and I&E FX window by 0.28% and 0.03% to NGN362 and NGN360.45 respectively. Meanwhile, total turnover in the I&E FX window dropped by 65.16% to USD98.60 million, trading within the bands of NGN358 and NGN361/USD.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate surged 1208 bps to 25.00% amid tight system liquidity. The CBN sold, via OMO auction, a total of NGN111.23 billion — NGN5.30 million of the 101DTM (at 12.60%) and NGN111.22 billion of the 227DTM (at 14.40%) — worth of bills.
- Sentiments were slightly bullish in the NTB secondary market, as average yield fell by 2 bps to 14.80%. Yields expanded at the short (-11 bps) end of the curve, driven by demand for the 31DTM (-76 bps) bill. Conversely, yields at the long (+3 bps) segment expanded, following selloffs of the 234DTM (+27 bps) bill.
- In the bond market, there was a reversal in the bullish trend, as average yield inched upwards by 1 bp to 13.50%. Yield contraction at the short (-1 bp) and mid (-1 bp) ends of the curve were offset by yield expansion at the long (+3 bps) segment. Notable bonds include the JUN-2019 (-2 bps), MAR-2027 (-2 bps) and APR-2037 (+20 bps).
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