May 2, 2018/Cordros Report
EQUITIES
- The equities market began the month on a positive note, as the ASI inched higher for the third consecutive session by 0.09% to 41,306.02 points, following interest in value stocks, as well as positive reaction to corporate earnings.
- Accordingly, the Year-to-Date gain improved slightly, to 8.1% — hitting the 8% mark for the first time since March 26th.
- The Oil & Gas (+1.22%) index recorded the highest gain, driven by demand for the shares of MOBIL (+9.55%) — which showed significant improvement in top (+79.1% y/y to NGN45.08 billion) and bottom (+21,005.6% to NGN2.76 billion) line performance in its recently released Q1-18 results. The Banking (+0.63%) and Industrial Goods (+0.31%) indices followed suit as UBA (+1.30%) and DANGCEM (+0.77%) recorded gains. On the flip side, the Consumer Goods (-1.09%) and Insurance (-0.59%) indices declined, owing to profit-taking in DANGFLOUR (-9.40%), and WAPIC (-3.64%) stocks, respectively.
- Market breadth remained positive, with 23 gainers and 15 losers, led by MOBIL (+9.55%) and DANGFLOUR (-9.40%), respectively. Total volume of trade decreased by 38.68% to 276 million units, while value of trades was 38.95% higher, at NGN6.89 billion, and exchanged in 5,327 deals.
- We retain our positive outlook for risky assets, and look for extension of gains on the exchange, as still-positive macroeconomic fundamentals suggest legroom for gains exist.
CURRENCY
- The USD/NGN appreciated marginally by 0.04% to NGN360.51, while it closed flat at NGN362 in the parallel market. Total turnover in the I&E FX window improved significantly by 112.49% to USD362.52 million, traded within the NGN357-363.50/USD band.
FIXED INCOME & MONEY MARKET
- The overnight lending rate fell by 21 bps to 2.21%, amidst still buoyant liquidity and the absence of OMO auction. OMO and treasury bills worth NGN186.68 billion and NGN190.84 billion will mature into the system tomorrow.
- Proceedings in the NTB market were bullish, as average yield decreased by 9 bps to 11.15%. The short (-23 bps) and mid (-15 bps) ends of the curve recorded yield contractions, while yield expanded at the long (+11 bps) segment. Notable bills include the 36DTM (-120 bps), 183DTM (-146 bps), and 218DTM (+126 bps) respectively. At today’s NTB auction, NGN9.54 billion, NGN47.71 billion, and NGN38.17 billion of the 91-day, 182-day, and 364-day bills were allotted. The bills were 4.22x oversubscribed, with yields closing lower across the 91-day (10.00%; previously 10.90%), 182-day (10.95%; previously 12.00%), and 364-day (11.15%; previously 12.08%) bills.
- Sentiments were mixed in the bond market, with average yield closing flat at 12.67%. Yield expanded at the short (+20 bps) end of the curve, following selloff of the JUN-2019 (+125 bps) bond. Conversely, the mid (-18 bps) and long (-8 bps) segments recorded yield contractions, driven by demands for the JAN-2026 (-26 bps) and JUL-2030 (-19 bps) bonds, respectively.
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