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Bears Sustain Dominance on Nigeria Equities Market, ASI Plunge 0.51%

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L – R: Shows Tinuade Awe, Executive Director, Regulation, NSE presenting a replica of the closing gong to Mr. Jordi Borrut Bel, Managing Director/CEO, Nigerian Breweries Plc during a Closing Gong Ceremony at The Exchange on Tuesday.

March 27, 2018/Cordros Update

EQUITIES

  • The bears continued to dominate the equities market, against expectations of a positive close (following broadly positive corporate releases), as the ASI plunged 0.51% to 41,243.24 points. 
  • Accordingly, the Month-to-Date and Year-to-Date returns moderated to -4.82% and 7.84%, respectively. 
  • Save for the Industrial Goods (+0.86%) index, which recorded a marginal gain, all other sector indices – Oil & Gas (-2.68%), Banking (-0.96%), Insurance (-0.60%), and Consumer Goods (-0.40%) – posted losses. The notable shares include; CCNN (+4.80%), SEPLAT (-5.00%), ZENITHBANK (-2.13%), NEM (-2.54%), and INTBREW (-5.00%) respectively. It is worth stating that investors’ positive sentiments in CCNN was buoyed by the company’s impressive performance in 2017, as shown in its FY-2017 results, with Revenue (+39.0% y/y to NGN19.59 billion) and PAT (+157.1% y/y to NGN3.22 billion) posting notable growth.    
  • Market breadth turned negative, with 31 losers and 21 gainers, led by DIAMONDBNK (-7.32%) and GLAXOSMITH (+10.16%). Total volume and value of trades were 7.12% and 19.28% lower, at 352.89 million units and NGN4.14 billion respectively. 
  • Despite continued selloffs, we reiterate our positive outlook for the equities market, as strengthening macroeconomic fundamentals continue to support likelihood of gains.

CURRENCY

  • The USD/NGN remained flat at NGN362 for the seventh consecutive session, while it weakened by 0.05% to NGNNGN360.23 in the I&E FX window. Total turnover in the I&E FX window increased further by 6.84% to USD277.01 million, with trades consummated within the NGN357-NGN361/USD band.  

FIXED INCOME AND MONEY MARKET

  • The overnight lending rate dropped by 2,233 bps to 21.92%, as NGN11.67 billion worth of OMO bills matured into the market.
  • Trading in the NTB market was mixed, as average yield closed flat once again (14.86%). Yields at the mid (-4 bps) end of the curve contracted while yields at the long (+3 bps) segment expanded. Yields at the short end closed flat. Notable bills include the 170DTM (-29 bps) and 282DTM (+47 bps).
  • Bearish sentiments persisted in the bond market, with average yield increasing by 8 bps to close at 13.61%. Selloffs of the JUN-2019 (+38 bps), MAR-2024 (+13 bps), and MAR-2036 (+8 bps) bills led to yield expansion at the short (+13 bps), mid (+8 bps), and long (+2 bps) ends of the curve, respectively.

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