March 21, 2018/Cordros Update
EQUITIES
- Investors in the equities market were downbeat, with the ASI declining by 0.46% to 41,495.43 points.
- Accordingly, the Month-to-Date and Year-to-Date returns moderated to -4.24% and 8.50% respectively.
- The Industrial Goods (-2.50%) index posted the largest loss, followed by the Insurance (-0.72%) and Consumer Goods (-0.72%) indices. On the flip side, the Banking (+0.06%) index closed positive, while the Oil & Gas index was flat. Notable shares include WAPCO (-6.55%), MANSARD (-7.41%), CADBURY (-9.64%), and FIDELITYBK (+7.76%), respectively. It is worth stating that DANGCEM shed 0.04%, despite the release of its FY-2017 results which showed an impressive performance, with gross revenue surging 31%, and PAT improving by 43% to NGN204.25 billion.
- Corporate earnings: FY-2017; ACCESS (PAT: NGN61.99 billion vs. NGN71.44 billion in 2016FY; DPS: NGN0.65).
- Market breadth remained negative, with 35 losers and 19 gainers, led by CADBURY (-9.64%) and FIDELITYBK (+7.76%) respectively. Total volume of trades increased by 19.49% to 488.97 million, valued at NGN5.64 billion, and exchanged in 5,524 deals.
- Our outlook for the equities market remains positive, supported by strengthening macroeconomic fundamentals.
CURRENCY
- The USD/NGN rate strengthened marginally by 0.001% to NGN360.29 in the I&E FX window, while it was flat in the parallel market, exchanging at NGN362. Total turnover in the I&E FX window declined by 1.36% to USD166.22 million, with transactions settled within the NGN350 to NGN361/USD band.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate fell by 1,017 bps to 22.08% (vs. 32.25% yesterday), on expectations of inflows from maturing OMO (NGN151.15 billion) and treasury (NGN107.91 billion) bills tomorrow.
- Proceedings in the NTB market were mixed, albeit with a bullish bias, as average yield decreased by 1 bp to 14.86%. Bills at the short (-9 bps) end of the curve attracted investor interest, while selloffs occurred at the mid (+6 bps) segment. Yields at the long segment were flat. Notable bills include the 8DTM (-139 bps) and 183DTM (+41bps). At today’s NTB auction, NGN5.40 billion, NGN8.39 billion, and NGN40.18 billion of the 91-day, 182-day, and 364-day bills were allotted. The bills were 1.48x oversubscribed, with higher stop rate in the 91-day (11.95%; previously 11.75%) and lower stop rate in the 364-day (13.15%; previously 13.19%) bills. Rate of the 182-day closed at 13.00%, same as the previous auction.
- Sentiments in the bond market were bullish, as average yield decreased by 4 bps to 13.45%. Yields contracted at all ends — short (-5 bps), mid (-5 bps), and long (-1 bp) — of the curve, following high demand for the JAN-2022 (-15 bps), MAR-2024 (-13bps) and JUL-2034 (-4 bps) bonds, respectively. Meanwhile, at the bond auction today, the DMO allotted NGN10.05 billion of the JUL-2021 note (re-opening), NGN8.91 billion of the MAR-2025 note (new issue) and NGN45.10 billion of the FEB-2028 (re-opening) note at respective marginal rates of 13.40% (vs. 13.70% previously), 13.53% and 13.60% (vs. 13.98% at previous auction).
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