April 23, 2018/Cordros Update
EQUITIES
- The domestic bourse opened the week on a negative note, with the All Share Index dropping by 0.12% to 40,763.93 points, following selloffs of Industrial Goods stocks.
- Accordingly, the Month-to-Date and Year-to-Date returns moderated to -1.78% and 6.59% respectively.
- The Industrial Goods (-2.72%) index posted the largest loss, owing to selloffs of FLOURMILL (-4.69%), WAPCO (-1.91%), and DANGCEM (-0.60%). We attribute WAPCO’s selloff to the disappointing Q1-18 result released by the cement producer early this morning, wherein a decline in revenue of 0.8% y/y and loss after tax of NGN2.00 billion was reported. The Banking (-0.58%) and Insurance (-0.45%) indices also recorded negative returns, as investors liquidated holdings in GUARANTY (-2.12%) and CONTINSURE (-5.14%) respectively. Meanwhile, interests in GLAXOSMITH (+5.61%) and FO (+4.94%) stocks led to gains in the Consumer Goods (+0.90%) and Oil & Gas (+0.56%) indices respectively.
- Market breadth remained negative, with 23 losers and 19 gainers, led by CONTINSURE (-5.14%) and LEARNAFRICA (+9.17%). Total volume of trades surged 118.84% to 530.22 million units, valued at NGN7.77 billion, and exchanged in 4, 567 deals.
- Despite continued selloffs, we reiterate our positive outlook for the equities market, as relatively lower share prices, as well as still-positive macroeconomic fundamentals, suggests legroom for gains still exist.
CURRENCY
- The USD/NGN remained flat at NGN363 in the parallel market, while it weakened by 0.03% to NGN360.54 in the I&E FX window. Total turnover in the I&E FX window rose by 66.23% to USD223.79 million, traded within the NGN327.00 – NGN361.50/USD band.
FIXED INCOME & MONEY MARKET
- The overnight lending rate dropped by 50 bps to 3.25%, against Friday’s close of 3.75%, amidst the absence of OMO auction to mop-up surplus liquidity in the system.
- Average yield contracted by 33 bps to 14.52% in the NTB market, on the back of buoyant liquidity. High demand for the 66DTM (-49 bps), 944DTM (-323 bps), and 283DTM (-291 bps) bills caused contractions at the short (-6 bps), mid (-44 bps), and long (-47 bps) ends of the curve, respectively.
- Similarly, activities were bullish in the bond market, as average yield declined by 7 bps to 12.60%. Yields fell across the short (-9 bps), mid (-6 bps), and long (-7 bps) ends of the curve, driven by demand for the JUN-2019 (-19 bps), MAR-2024 (-11 bps), and JUL-2034 (-14 bps) bonds, respectively.
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