March 26, 2018/Cordros Update

EQUITIES

• The bourse started the week on a bearish note, as the ASI inched lower by 0.04% to 41,454.30 points, owing to continued selloffs of major stocks.

• Accordingly, the Month-to-Date loss increased to 4.33%, while the Year-to-Date return was lower at 8.40%.

• The Oil & Gas (-2.54%), Industrial Goods (-2.01%), and Banking (-0.45%) indices posted negative returns, owing to selloffs in the shares of FO (-9.09%), WAPCO (-4.00%), and GUARANTY (-3.41%) respectively. Meanwhile, demands for CUSTODIAN (+10%) and CADBURY (+4.81%) stocks supported the Insurance (+1.28%) and Consumer Goods (+0.26%) indices.

• However, market breadth remained positive, with 34 gainers and 17 losers, led by CUSTODIAN (+10%) and FO (-9.09%). Total volume and value of trades dropped by 32.17% and 24.08% to 379.93 million units and NGN5.13 billion respectively.

• Our outlook for the equities market remains positive, buoyed by still-positive macroeconomic fundamentals.

CURRENCY

• The USD/NGN weakened by 0.02% to NGN360.06 in the I&E FX window, while it was flat at NGN362 in the parallel market. Total turnover in the I&E FX window was 66.25% higher at USD259.27 million, traded within the NGN348-NGN361/USD band.

FIXED INCOME AND MONEY MARKET

• In the absence of any inflows to boost system liquidity, the overnight lending rate spiked 2,108 bps to 44.25%, from 23.17% last Friday.

• Activities in the treasury bills market were mixed, as average yield closed flat at 14.86%. Yields expanded at the short (+1 bp) end of the curve, driven by selloffs of the 80DTM (+37 bps) bill. Yields at the mid and long segments were flat. 

• The bond market was bearish, with average yield inching upwards by 1 bp to 13.54%. The short (+2 bps) and mid (+less than 1 bp) segments experienced sell pressure, with the FEB-2020 (+10 bps) and MAR-2027 (+1 bps) bonds recording significant expansions. Yields at the long end were flat.

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