April 18, 2018/Cordros Report
EQUITIES
- Proceedings turned bearish in the equities market, with a marginal dip in the ASI by 0.04% to 40,772.26 points.
- Accordingly, the Month-to-Date and Year-to-Date returns moderated to -1.76% and 6.61% respectively.
- The Oil & Gas (-1.68%) index recorded the largest loss, followed by the Industrial Goods (-1.00%) and Consumer Goods (-0.40%) indices, owing to profit-taking in SEPLAT (-3.29%), WAPCO (-2.04%), and INTBREW (-2.10%) shares respectively. On the flip side, the Banking (+0.22%) and Insurance (+0.06%) indices closed in the green, following gains in the shares of FBNH (+1.63%) and AIICO (+1.45%) respectively.
- Market breadth remained positive, with 24 gainers and 18 losers, led by JAIZBANK (+10.00%) and UBN (-4.76%) respectively. Meanwhile, volume and value of trades dropped from yesterday’s record highs by 85.64% and 60.43% to 230 million units and NGN4.32 billion respectively, exchanged in 4,090 deals.
- Despite today’s negative performance, we reiterate our positive outlook for the equities market amidst strengthening macroeconomic fundamentals.
CURRENCY
- The USD/NGN strengthened by 0.09% to NGN360.16 in the I&E FX window, while it remained flat at NGN363 in the parallel market. Total turnover in the I&E FX window inched 7.83% higher to USD361.38 million, traded within the NGN330-NGN361.35/USD band.
FIXED INCOME & MONEY MARKET
- The overnight lending rate fell by 30 bps to 2.33% amidst still buoyant liquidity and the absence of any OMO auction. OMO and treasury bills worth NGN276.08 billion and NGN73.07 billion will mature into the system tomorrow.
- Proceedings in the NTB market were bullish, as average yield decreased by 13 bps to 12.39%. The short (-2 bps), mid (-6 bps), and long (-29 bps) segments recorded yield contractions. Notable bills include the 36DTM (-45 bps), 148DTM (-92 bps), and 204DTM (-186 bps). At today’s NTB auction, NGN5.85 billion, NGN29.25 billion, and NGN23.40 billion of the 91-day, 182-day, and 364-day bills were allotted. The bills were 7.51x oversubscribed, with yields closing lower across the 91-day (10.90%; previously 11.75%), 182-day (12.00%; previously 12.70%), and 364-day (12.08%; previously 13.04%) bills.
- Proceedings turned bearish in the bond market, with average yield increasing by 12 bps to 12.89%. Yields expanded across the short (+43 bps) end of the curve, following selloffs of the JUN-2019 (+152 bps) bills. Conversely, the mid (-2 bps) and long (-7bps) segments recorded yield contractions, driven by demand for the MAR-2027 (-7 bps) and JUL-2034 (-11 bps) bonds, respectively. Yesterday, the DMO released the Q2-2018 bond issuance calendar and the bond offer circular for April. In sync with the FGN’s bias for cheap longer dated external debt, the calendar indicates a reduced offer amount of NGN220 billion (vs. NGN280 billion in Q1-2018 and NGN415 billion in Q2-2017) – strengthening the case for lower yields in the short term. Meanwhile, the circular revealed an increased offered amount of NGN90 billion (NGN30 billion a piece of the 5, 7 and 10-year bonds) compared to the NGN70 billion offered in March.
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